Regulatory Capture: O-stock CEO, Ron Paul, Gold-Sachs Corruption

by Roy C | July 18, 2009 at 12:38 pm

447 views | 25 Recommendations | 9 comments

Regulatory capture. That is the term the Overstock CEO Patrick Byrne uses to describe the reality that Wall Street now controls the regulatory bodies set up over the last one hundred years to regulate Wall Street.

Regulatory capture is a term used to refer to situations in which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating.

Ever wonder how it could be that executives at Stanford Secuirities could blow the whistle on what was going on there and yet nothing got done until the situation was completely untenable financially? And then to find that there was another Stanford Whistle Blower, former Stanford employee Layla Wydler, who spilled the proverbial beans to the SEC six years ago...?

How to account for such complacency in the regulatory agencies?

Did you know that several major Wall Street companies blew the whistle on Bernie Madoff years ago as well? One, in particular, has a story worth repeating here.

The fraud investigator who tried for a decade to convince the SEC to investigate Bernie Madoff will deride the board's "financial illiteracy" before a Congressional panel today, according to prepared testimony obtained by the Wall Street Journal.

Whistleblower Harry Markopolos will also testify that investigating Madoff "posed great danger" to investigators, reports the New York Times, and that he feared for his life. In 2005 Markopolos submitted a huge dossier to the SEC concerning Madoff's Ponzi scheme, to no effect.

The SEC "is nonfunctional and, as witnessed by the Madoff scandal, is harmful to our capital markets and harmful to our nation’s reputation as a financial leader,” Markopolos' testimony reads.—Jason Farag

This week, Patrick Byrne, founder and CEO of the successful Internet company Overstock.com, appeared on the Glenn Beck show to say that Goldman Sachs was a criminal organization, which he compared to the infamous Corleone Crime Family of "The Godfather". This interview appears in the video after Beck's enlightening explanation of the web of financial interests that demonstrate Goldman Sax's control of the very regulatory agencies that should be monitoring, investigating and prosecuting evil-doers on Wall Street and the US financial markets.

For Byrne, the corruption extends into the financial press which supports Wall Street and which refuses to conduct their own independent investigations and has become an arm of propaganda, as it were, of Wall Street.

This was followed by an interview with Ron Paul on the fed.

One of the most important points made was that around the world such financial crises have been met with the election of some reform-minded national leader who promises change and reform, only to have it dissolve into "happy talk" with no real clean-up of the financial sectors and their corruption.

The questions we, as citizens, have to ask ourselves are the following: who are the people, institutions whose practices have taken us to the brink of total financial meltdown?

What people are now in charge in Washington? What practices, such as no money-down mortgages or AAA ratings on junk bonds of non-performing assets from Moody's, have been curtailed?

Looking at Beck's tangled web on Wall Street and Washington, and hearing Byrne and Ron Paul, do you get the feeling that President Obama stands functionally for change in this area?

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Amy Judd

at 13:28 on July 18th, 2009

I had no idea that several Wall Street companies blew the whistle on Madoff years ago; it's amazing what comes out after the fact when everyone goes 'oh yeah, guess we should have paid more attention'.

Roy C

at 13:39 on July 18th, 2009

Thanks, Amy, and, if you can spare the time, listen to Beck's description of the web of Goldmann Sachs people who control Washington and how their "profit" is just the AIG money that AIG owed them that ex-pres of GS, Sec of Treas Paulson gave them as TARP money, after he let the competition for GS, namely Lehman and Bear Stearns, die.

This stinks and the only way it gets out there is Beck and the "right-wing nut jobs" and some guys on the left such at Thomas Frank.

Roy C

at 14:19 on July 18th, 2009

The Ron Paul interview talks about how the Fed Reserve Bank, which is a private bank, not a branch of the government, has something like 9 trillion dollars of "off-balance sheet" investments.

This "off-balance sheet" stuff is what took down Enron, and other companies.

What Ron Paul wants to do, and can't seem to find support for, is to get the Fed to open its book for a public inspection.

Beck makes the point that he interviewed Karl Rove the other day and that Karl Rove's attitude was that "we have had the Fed since 1912" and gave no support for the idea of looking into their books.

That is the kind of collusion that the Bush administration engaged in that seems to be part of the Obama administration as well.

Obama protects Wall Street as long as he get to control it, but what is really happening is that we are being milked and Obama may simply lack the guts to go against Wall Street.

So, where are all the libs of NowPublic who should be against this? Are you afraid that you might have to agree with the "right-wing nut job" Glenn Beck, or are you afraid that Obama is not the real thing, and that he won't do jack-squat about the corruption of Wall Street?

On this issue, he is just another Bush. Frankly, I would not have predicted this, not to this extent.

Rory Cripps

at 04:54 on July 19th, 2009

It seems like the Federal Reserve, throughout its history, often caused more monetary and financial instabilty than it cured. America needs another Andrew Jackson to lead the charge against the Bank Of The United States!

Barry Artiste

at 04:57 on July 19th, 2009

C'mon now Roy, you should know when most stories extol even a hint of right of centre truh, always betray the Libby Ideology, so you will get nary a nod here from them. Most are performing a Heimlich manoeuver on themselves as they once again "Gag" on their Tofu Lattes, as they are evacuating their colons inside their bicycle shorts.

Rory Cripps

at 05:59 on July 19th, 2009

Barry: that's quite the metaphor! LOL!

158

at 18:53 on July 20th, 2009

Lots of good information,Thanks

sirgeraldbirkin (not verified)

at 11:09 on August 5th, 2009

This article is nothing but MORE name-dropping and empty technology dribble to form ANOTHER "shell" holding company for Ed Berkhof. Who does he think he is? Allen Stanford? Trip Camper? Ed Berkhof and his previous co-conspirator, Sidney D. "Trip" Camper used name dropping, donations to St. Jude's, falsified tax documents, and bullying to get private investors to hand over thousands of dollars in cash, and ultimately control of their company Ed berkhof is a third rate bass player looking for his new victim. SEC files state that Sidney Trip Camper was fired from Elandia by Allen Stanford when the Ahkoy family's business fell victim to investment fraud. Before the ink was dry on his resignation letter, Trip Camper and Ed Berkhof were already busy ruining ANOTHER private company - in Los Angeles. The FBI has nabbed Allen Stanford and is now looking for other schemers in his network like Sidney D. Trip Camper and Ed Berkhof.