Courtesy of Pam Martens.
The scene in the House Financial Services Committee hearing yesterday was surreal. After Mary Jo White bluntly told the panel that “The markets are not rigged,” (countering heavily publicized charges made by bestselling author Michael Lewis in his new book, “Flash Boys,” as well as a host of key market participants) members of Congress continued to ask about specific forms of market rigging that they know to be happening. While White refused to acknowledge that this obvious wrongdoing was occurring on her watch, she insisted repeatedly that these various non-problems were, nonetheless, being studied. Congressman David Scott from Georgia told White he sensed a lack of urgency on her part.
The remarks from Congressman Michael Capuano of Massachusetts were particularly heated and generally reflected the frustration with White’s responses from a large part of the Committee. Capuano said:
“Six years ago we had a humongous financial crisis — greatest in my lifetime, hopefully the last in my lifetime, we’ll see. Five years ago we passed a significant law to try to address some of the things that caused that crisis. Three years ago the SEC passed some proposed regulations, adopted proposed regulations, relative to credit rating agencies that came out of that Dodd-Frank bill – three years later those rules are still not finalized.
“A few years ago Supreme Court made a ruling that corporations are people and they can spend money any where they want…many of us asked the SEC to address that issue — to simply require corporations who make political donations to simply publicize them — and the SEC has now taken a walk on that request after several years of being asked.
“Recently you had one of your long term attorneys, who I understand is well respected within the agency, retire. At his retirement party, he basically criticized the SEC’s approach over the last several years as being too timid relative to enforcement actions against some of the biggest names on Wall Street, therefore leading to an attitude on Wall Street that what’s the big deal, we can get away with it; maybe pay a small fine relative to the rewards we reap.