SEC mis-regulates again. Fracking witch hunt is federalized. #SEC #fracking #corpgov #irchat

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WSJ reports that the SEC is bearing down on Fracking. The Securities and Exchange Commission which is tasked with regulating capital markets and is constantly under-staffed and under-resourced thereby allowing pirates to loot pillage and rape on Wall Street is asking oil and gas companies for detailed information about the use of “Fracking” The information is to include details about chemicals used and efforts to minimize environmental impact.

Does the SEC have a body of competent employees who can assess detailed fracking information. I think not. Why would the SEC do the work of environmental regulators? bureaucracy running rampant.

But remember this could be all part of the great Marcellus Shale conspiracy theory. By getting the wrong regulator involved in the fracking investigation you will only screw up the reports and eventually throw them away as useless.

But if you are a securities lawyer with some knowledge of fracking your market value is up big time.

Disclosure: George Gutowski writes from a caveat emptor perspective. I personally have no involvment in fracking but I do heat with natural gas. I have no positions in stocks or commodities mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

SEC Edgar suspension unacceptable Document Destruction smoke screen #SEC #edgar #irchat #corpgov

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So we have an earthquake on the eastern seaboard. Totally not used to this. At least not like in California. So the Securities Exchange Commission [SEC] freaks and shuts down Edgar. Another example of how SEC fails to serve. Strong democracies need strong capital markets. Excellent capital markets thrive on timely and accurate information.

Edgar was not up to the challenge. Could be good cover for the document destruction scandals.

Watch for another budget fight as SEC asks for money to become earthquake proof. Waiting for someone to sue SEC for inadequate something or other.

Disclosure: George Gutowski writes from a caveat emptor perspective. I am not earthquake-proof but I do value a reliable regulatory environment.

SEC Christmas


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Just thinking out loud here. But if the FBI made arrests just before Thanksgiving day, what will they do just before Christmas? The SEC wants to send signals to the stock market. Police raids are now media events. Financial news will be very slow right around Christmas.

If you are a hedge fund manager who has done particularly well can you spot the surveillance? Who is sitting in that  car parked down the street from your fancy home?

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.

Google & Microsoft Violate Reg FD

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Google (GOOG) and Microsoft (MSFT) appears to have violated Reg FD. In todays Dealbook Andrew Ross Sorkin calls out the two technology giants with recent breaches.

Microsoft on Oct 18 which was a Monday published its quarterlies on the Microsoft website at 16:15. The 8K was filed with the SEC at 16:28. A press release letting the world know about the existence of material new information was issued at 16:44. Any beginner student in compliance can tell you this is ass backward. I cannot believe a lawyer(s) said this is OK. I cannot believe the Securities and Exchange Commission (SEC) is letting this one get by. 

Google has started doing the same this summer publishing financial results on its website first at 16:00 Reuters could not get a headline off until 16:21.

In both cases the financials were released after market close. But after hours trading was a factor. Does the SEC regulate the after hours markets? Both firms lay claim to letting the internet do the dissemination claiming anyone who wants has a RSS feed. Both firms have huge vested interests in search engine technology. Are they trying to enhance their own search engines?

No word on how quickly Google Finance and MSN Money were updated. The question now becomes why. The markets knew the releases where coming. The dates are announced weeks in advance. But why take the risk of a SEC investigation? Why take the risk of class action lawsuits? Why take the risk of looking stupid and annoying investors?

The two firms are starting to mimic each other. No one is impressed. Investor relations does not use these instances as best practice examples. Hubris and arrogance because they are big. The market needs one rule for all issuers. the rules are there for the investors not the reporting companies.

Suggested SEC action. Have the Boards of Directors explain their oversight of fundamental no brainer compliance issues. they are ultimately responsible. While we are at it lets check some trading records. Hey didn’t that Microsoft guy   Steve Ballmer just sell a ton of his holdings. Hmm There are no accidents some will say.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.

Office Depot Disclosure Challenged?

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Office Depot (ODP) fired the chairman of their board and CEO, Steve Odland. It was the only plausible action available after the Securities and Exchange Commission found him personally guilty of breaking Reg FD. Watch for the shareholder rights lawsuits to come.

The press release sounded like a tearful farewell. you know the board did not have their heart in it. Therefore what compliance culture will they have in the future? To distract investors from executive malfeasance or what could be described as very bad judgement in the executive suite, the board signalled earnings and just came out and said we will beat expectations. Desperate tactic so that the stock does not drop. Actually they got a nice initial bounce north of $5.00 and then watched the stock slide off.

It is about the culture. Steve Odland was the head man for a long time. You have to believe his value system permeated the executive suite. Has all the cancer truly been removed? The competition is just licking its chops savouring an extra big lunch soon. Private Equity Capital is considering a take over because management is not that smart and needs a shake up.

Heidrick and Struggles is doing the executive search for a permanent replacement. If they call you do you really want to go to lunch?

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.

Office Depot Guilty?

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Office Depot (ODP) settled SEC charges regarding Reg FD violations. Stephen Odland and Patricia McKay will each pay $50,000 personally. However because of their incompetence (nicest thing we can say) in violating clear Reg FD policies Office Depot will have to pay out a $1 million fine. Why do the shareholders have to pay the fine for the inappropriate actions of the two executives. I would like to see the Board hold them accountable. After all they were the CEO and CFO not just junior staffers.

Can you imagine working for a boss who has violated  securities law and then watch them sign off on compliance sensitive issues. Will investors trust these two again. Stephen Odland is still the CEO and Chairman of the Board.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no position in stocks mentioned in this post.