Matt Taibbi: SEC Has ‘Terminal Brain Damage’ for Deleting Files

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Buddy buddy. Photo: iStockphoto

The always bombastic Matt Taibbi is back with a new article about the crimes of Wall Street for Rolling Stone, this time taking aim at the policies of the Securities and Exchange Commission. The agency, Taibbi writes, has a "revolving-door dynamic" that means "the SEC's top policemen almost always wind up jumping straight to jobs representing the banks they were supposed to regulate." In his view, this might explain why staffers have a hard time getting investigations of big financial institutions greenlit. And that's important because, as one whistle-blower explains, when the SEC declines to push forward on a case, they delete all documents associated with preliminary "Matters Under Inquiry," including two almost-investigations of Bernie Madoff, two of Lehman Brothers, and one from 2009 of Goldman Sachs.

But it's more than a "bureaucratic fuck-up," Taibbi writes: It's actually "terminal brain damage" because the SEC "fell and hit their head on a big pile of Wall Street's money," or in the words of one former SEC staffer, the agency is "infected with the Goldman mindset from within." Metaphors and corruption abound, as usual.

Is the SEC Covering Up Wall Street Crimes? [RS]