Monday, February 27, 2006

More on 'Never Mind'

Securities and Exchange Commission chairman Christopher Cox today elaborated on the "never mind" that his people gave to the media on Friday when asked about the Greenberg-Remond subpoenas. He issued a statement this morning, saying as follows:
"The issuance of a subpoena to a journalist which seeks to compel production of his or her notes and records of conversations with sources is highly unusual. Until the appearance of media reports this weekend, neither the Chairman of the SEC, the General Counsel, the Office of Public Affairs, nor any Commissioner was apprised of or consulted in connection with a decision to take such an extraordinary step. The sensitive issues that such a subpoena raises are of sufficient importance that they should, and will be, considered and decided by the Commission before this matter proceeds further."

Reassuring, isn't it? Cox and -- well, it seems pretty much everyone else at the SEC, including the spokesman's office -- weren't aware of two journalists being subpoenaed until.... reading about it this weekend?

Gee. The top spokesman for the SEC, John Nester, told the New York Times on Friday: "Under longstanding practice, the S.E.C. generally subpoenas journalists only when it is absolutely necessary and after careful thought and consideration."

I have to admit, I am having a bit of trouble understanding how nobody in authority, not even the spokesman's office, knew what was going on until the weekend when the SEC's top spokesman was saying things like that on Friday.

Anyway, I guess things will sort themselves out eventually. Meanwhile, as long as Chairman Cox and everybody else are reconsidering the subpoenas, maybe they'll want to rethink the investigation that gave rise to the subpoenas.

The investigation was apparently prompted by Overstock Inc.'s CEO Patrick Byrne, whose naked-shorting and "Sith Lord" conspiracy theories are a subject of derision throughout the civilized world. Byrne seems to have known that some kind of trouble was on its way on Feb. 7 -- before the subpoenas became public knowledge -- as Chris Byron pointed out in the New York Post today.

Might be a good idea for the SEC to give "careful thought and consideration" to dropping that wild goose chase. Might also be a good idea to figure out how it was sent on said wild goose chase by this particular conspiracy-theorist-CEO. Might also be a good idea for the SEC to turn its attention to a more pressing problem facing the markets -- a fraudulent naked shorting conspiracy cult that is diverting attention from real stock fraud.

I write about the naked shorting loons, and their surprisingly effective "Baloney Blitzkrieg," in my forthcoming book Wall Street Versus America. WSVA is hitting the book stores on April 6. Now, I could go on and on about the book, but I won't! I'll limit the shameless commercialism to this tiny little link to and this even more tasteful link to my website.

PREVIOUSLY: The SEC's Keystone Kops in action.

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