Once again, the WSJ comments are more interesting than the story. Commenters seem evenly divided between the “Barry’s government is incompetent” and the general acceptance of the idea that the SEC is thoroughly bought off:
Federal securities regulators, in a sensitive breach, inadvertently revealed the identity of a whistleblower during a probe of a firm that ran a stock trading platform.
The gaffe by the Securities and Exchange Commission occurred during an investigation of Pipeline Trading Systems LLC when an SEC lawyer showed an executive who was being questioned a notebook from the whistleblower filled with jottings about trades, calls and meetings. The executive says he recognized the handwriting.
Hhhmmm — Bug or feature?
Newbie atty or Bush holdover?
WikiLeaks is still very necessary.
A comment by a whistleblower whose cover was blown by an SEC atty now running as a Republican for NY1 ongressional district gives a link to his story of being burned by the SEC.
From Googling:
Daily Markets Larry Doyle blogs his analysis (yeah, the SEC is well and truly captured).
<a href=http://www.dailymarkets.com/stock/2012/04/26/the-sec-vs-whistleblowers-round-2/"Doyle also prints the SEC ltr to the editor at the WSJ which states the revelation of the source was not a gaffe or mistake. The post has more information on the effect of this revelation.
SEC Did Not Blow Source’s Cover Material below is direct quote:
The Securities and Exchange Commission in no way exposed Peter Earle as a whistleblower, and our use of his notebooks in an investigative deposition was neither “inadvertent” nor a “breach” or “gaffe” (“Source’s Cover Blown by SEC,” Page One, April 25). It was a deliberate decision, which SEC lawyer Daniel Walfish discussed in advance with his supervisor, who was present for the deposition in which the notebooks were exhibited. Nor did the fully authorized use of the notebooks in any way compromise Mr. Earle or the integrity of the SEC’s investigation of the Pipeline Trading Systems matter.
Although it was widely known among executives of Pipeline and Milstream Strategy Group that Mr. Earle had approached the SEC after he was terminated from Milstream—a fact volunteered by several witnesses and acknowledged by Mr. Earle long before any use of his notebooks—the SEC declined to confirm his identity and still treated his status as a cooperating witness as confidential. The SEC made sure to obtain all of the notes of the approximately six Milstream traders, and in the SEC’s deposition of Gordon Henderson (the supervisor of Mr. Earle and the other traders), the SEC used other traders’ notes along with those of Mr. Earle. The use of these traders’ notes—highly relevant evidence prepared in the ordinary course of their work at Milstream—in no way revealed whether Mr. Earle or any other trader was or was not cooperating with the SEC.
George S. Canellos
Director
New York Regional Office
U.S. Securities and Exchange Commission
New York
End quoted material.
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Pipeline says it all.