What did Robert Khuzami know about $12 billion in hidden losses at Deutsche Bank? Probably nothing. And that's the problem.
---
By John Titus, creator of the documentary, Bailout.
S.E.C. Obeys Peter Principle, Not Rule Of Law
More evidence that the financial crisis is a legal crisis in drag has emerged with two stories about the hiring of top regulators after they failed to detect massive financial frauds that occurred right under their noses.
First is S.E.C. enforcement head Robert Khuzami. Before becoming top cop at the S.E.C., he was Deustche Bank’s top lawyer while it was concealing $12 billion of losses in late 2008, according to people who worked there.
Reports of Deutsche Bank's Houdini act followed Khuzami straight to the S.E.C., which is now in possession of three separate reports from bank insiders about the $12,000,000,000.00 concealment under its top gumshoe.
The S.E.C. has ignored the reports, which are believed not contain the hardcore pornographic evidence favored by regulators there.
It certainly isn’t the first time the S.E.C. has ignored reports of colossal accounting fraud. The S.E.C. also ignored multiple reports entitled “The World’s Largest Hedge Fund Is a Fraud,” about Bernie Madoff.
(The S.E.C. stopped ignoring these reports when Mr. Madoff voluntarily informed law enforcement officials that his $50 billion fund was, in fact, a total fraud.)
Curiously—at least outside of the S.E.C.—the staggering loss concealed by Deutsche Bank in 2008 matches the $12 billion welfare check from U.S. taxpayers when they bailed out AIG counterparty… Deutsche Bank exactly when the bank concealed the loss.
Previously, Stone was a director at Morgan Keegan & Co. While there, she was involved in an accounting scandal that relieved investors in her firm’s mutual funds of $1.5 billion.
This week the S.E.C. charged Stone with “violating their asset pricing responsibilities under the federal securities laws.”
The S.E.C. has not said whether victims of Stone's hedge fund debacle will get their money back, or whether porn is involved.
***
John Titus has practiced law in federal courts for more than 15 years.