In Monday's (updated) OtBB entry, "Demos outed as a 'rat'" examining the perennial Congressional wannabe's unscrupulous dealings with whistle-blower Peter Sivere, the question of "Why?" was raised... and speculated on:
"Who knows? Perhaps Sivere's approach and motivation offended Demos's personal sense of propriety."
Perhaps more important is why SEC Attorney Demos told Sivere that, according to Bloomberg News' investigative report of the matter:
"Demos informed Sivere that no bounty was available."
A most curious assertion indeed, since §21B(e) of the Securities Exchange Act of 1934 reads:
"authority to award bounties to informants. Notwithstanding the provisions of subsection (d)(1), there shall be paid from amounts imposed as a penalty under this section and recovered by the Commission or the Attorney General, such sums, not to exceed 10 percent of such amounts, as the Commission deems appropriate, to the person or persons who provide information leading to the imposition of such penalty. Any determinations under this subsection, including whether, to whom, or in what amount to make payments, shall be in the sole discretion of the Commission, except that no such payment shall be made to any member, officer, or employee of any appropriate regulatory agency, the Department of Justice, or a self-regulatory organization. Any such determination shall be final and not subject to judicial review."
How could Demos make that determination? The mechanism is provided for in the law, and since Sivere possessed no disqualifers, if an investigation of JPMorgan Chase had been undertaken and a penalty imposed, then the whistle-blower should have collected a "bounty."
Did Demos hope to discourage Sivere from providing documents if the monetary incentive was gone?
(Sivere made no bones about his motivation1: in contacting Demos, he used the E-dress of "firstname.lastname@example.org.")
Demos seems to have spent the entirety of his career at the SEC ignoring Bernie Madoff.
(Demos was not alone in that regard; beginning in 1992 there were six botched SEC investigations of Bernard L. Madoff Investment Securities LLC, either through incompetent staff work or neglecting allegations of financial experts and whistle-blowers. But only Demos wants to be my Congressman.)
So if Demos wasn't actively trying to tank an investigation of JPMorgan Chase, then his competency is very much in question.
But given his willingness to rat Sivere out to his employer as a whistle-blower2, it's the ethics and integrity of George Demos that must be questioned.
Answer – very sleazy.
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