The Blue Team dealt the public a trifecta of disturbing legal stories. The first was a shot across the bow of private equity underwriters (PEU's) at their Compliance soiree in New York. Despite securing information on widespread fee abuses, a SEC representative made sweet talk to the big money boys. This could be the latest round of egregious actions swept under the rug by the political team in power.
Recall corporate chiefs backdating stock options on a widespread basis? Some 30% of options were backdated. This compares to 50% of PEU's doing untoward things with investor money and calling them "fees." I smell a build to 2016 election year tough talk, after which seemingly magical settlements are reached with PEU founders, letting them escape with kajillions.
Next up in Blue "Just Us" comes the case of New York Fed whistleblower, fired for raising concerns about Goldman Sachs. Legal liars did their usual word bending and twisting. I'm not sure the contortions were necessary given the judge's husband, a partner at the law firm Davis Polk, "was representing Goldman in an Advisory capacity." Add that the judge once worked for Davis Polk and the Senator who nominated the judge for the federal bench also worked at Davis Polk.
This judge spurned efforts by the fired whistleblower to understand the nature of her husband's relationship and did not recuse herself from the case due to apparent or perceived conflicts.
The last involved the Treasury, FBI and Justice Department effectively looking the other way over abuses that led up to the financial crisis.
So far, I’ve heard almost nothing about the ethics and professional responsibility of lawyers in what many Americans consider to be a complete breakdown in effective white-collar law enforcement against the most powerful in the wake of a devastating financial crisis.
President Obama said they wouldn't go there and his team hasn't. This should set him and other Blue leaders up for high paying PEU advisory slots post "public service."
