BLOWVEMBER  9:57 am November 20, 2012

A Children’s Treasury Of Things In New SEC Lawsuit That Are More Hilarious Than Its Sex Triangle

by Kris E. Benson

Not even kidding, this guy was getting so much strange (ALLEGEDLY)Oh goody, another day, another set of government officials involved in a sex scandal. Rolling Stone brings us the ewww tale of SEC Inspector General David Kotz (ALLEGEDLY) boning every lawyer (like this pretty lady) with business before the agency, as well as his successor, Noelle Maloney, who then refused to meet with said lawyers because
“DAVID WAS FUCKING THAT LADY!” Until we see pix, it’s no Broadwell-Kelley Tampa Tap-Out. So what else is in this 77 page whistleblower complaint, you might be wondering? Is it all seks and lies and intrigue?

Well, sure there is some! But more hilarious are the accusations of gross malfeasance and incompetence, the likes of which (if true) may be egregious enough to compromise the functioning of Stock Exchange itself (to the degree that it functions right now, of course). No big deal though!

First things first: the SEC at one time spent $4 million to rearrange the desks of less than 2000 employees:

PAGE 10:

[Maloney] described an affair that Kotz had during a review conducted by the OIG into the SEC’s “Restacking Project,” in which the SEC spent approximately $4 million dollars relocating the desks of around 1,750 SEC employees. Maloney stated that Kotz had an affair with one of the key SEC personnel involved with this project, despite being responsible for leading the review, and having personally authored sections of the final report, concerning the allegations of waste in the project.

Also, at one time, a 23 year old recent college grad, with no experience in security, was possibly hired by the Chief of Security to oversee physical security at the SEC:

PAGE 22:

[A] whistleblower, who was responsible for performing physical security for the SEC, was ultimately transferred by [Chief of Security William S.] Fagan, and his/her position was filled by a 23 year old female, who has no experience in security services and whose father has a personal connection to Fagan. This replacement employee was hired directly after college graduation, with no security experience whatsoever, and in violation of the Merit Systems principles for competitive service hiring.

Up to 100 employees were maybe handling extremely sensitive material absent any background checks:

PAGE 27:

[At one point, anywhere from] 50 to 100 SEC contractors were employed at the SEC without any background screening due to backlog. Many of these employees, like [a] contractor involved in [a sexual] assault [on SEC property], had never been screened, despite having been employed at the SEC for years. Some of these employees, like the contractor, were granted access to the SEC’s most confidential data, such as consumer records and confidential, corporate records produced to the SEC in investigations…

One of them was on early parole release for felony narcotics possession.

PAGE 27

Further, the OIG obtained the criminal background [of a particular contractor] which showed that he had multiple criminal convictions and was on an early parole release from a 10 year prison sentence in the Commonwealth of Virginia for felony narcotics distribution. Despite this criminal background, the contractor had been permitted to work with the SEC’s most sensitive enforcement data as an enforcement forensic IT contractor for years.

Sadly, “Penetration Testing” has naught to do with sexytime.

PAGE 35:

SEC examiners assigned to the Division of Trading and Markets performed “penetration testing” of the computer infrastructure of the NYSE, NASDAQ, and all other major exchanges. […]

The information obtained by this ARP examination program is of an extremely sensitive nature. In the wrong hands, this information could be used to disrupt trading activities on all of the exchanges, either individually by exchange, or at all exchanges simultaneously…In the OIG inquiry into the alleged misuse of computer equipment, Weber and his investigators found that the laptops which were used by SEC examiners during these examinations, and on which all the information from the examinations were stored, neither contained virus protection, encryption programs, or firewalls, nor were they ever wiped clean after testing. Some of the computers at issue were used in every stock exchange in the United States, and therefore exposed exchanges to infections or compromises that could be brought from exchange to exchange…

Some of these laptops were brought to foreign countries by SEC management, and by certain SEC management and employees to the “Black Hat” Conference in Las Vegas, Nevada.

Many of these unsecured laptops were probably brought to a hacker convention in Vegas.

PAGE 36:

The “Black Hat” Conferences are infamous for the illegal activities that occur during the Conferences. In an August 4, 2009, CNN article describing these conferences, the author notes, “[a]t a hacker conference no one is safe.” Indeed, senior IT security personnel at the SEC had acknowledged to Weber as part of the investigation that they were themselves too afraid to attend this Conference.

a.            During the 2009 Conference, websites belonging to security researchers were hacked and passwords, private e-mails, and other sensitive documents were released on a vandalized website.

b.            During the 2008 Conference, a thumb drive that was passed around by attendees was found to contain a computer virus.

c.            During the 2008 Conference, some attendees, themselves security experts, who used the Wi-Fi networks had their passwords “sniffed” and then posted on an electronic bulletin board called the “Wall of Sheep.” One “Wall of Sheep” participant remarked how surprising it was that so many Black Hat attendees were insecure.

d.            Also during the 2008 Conference, three French reporters were caught hacking into the press room network.

It’s cool though. No big deal.

PAGE 38:

When Weber questioned the SEC examiners as to why they would bring their laptops, containing extremely sensitive information, including the architecture and trading engines of the major stock exchanges, to the Black Hat Conference, they replied to the effect that they didn’t “think it was a big deal.”

So what happened, in the end, after this Weber guy became absolutely panicked at the thought of SEC employees or contractors, who may or may not have been given security clearance, taking unsecured laptops to a hacker convention in Vegas filled with foreigners, networking experts, and French reporters? Weber was canned, and forcibly escorted off SEC property.

But it’s cool, we’ll just hope that none of this stuff is true and all this personal financial information — as well as the integrity of the stock market — is ok.

[Rolling Stone]

 
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{ 113 comments }

BaldarTFlagass November 20, 2012 at 10:01 am

THAT guy? Man, I am definitely doing something wrong.

CapeClod November 20, 2012 at 10:16 am

I'm thinking that Kotz has the biggest personal supply of roofies in America.

One_who_wanders November 20, 2012 at 10:20 am

Every man who reads this will think that . . . .

EatsBabyDingos November 20, 2012 at 10:21 am

Maybe he had his briefs, ahem, "surgically enhanced."

Tundra Grifter November 20, 2012 at 10:58 am

"Race Horse" Hanes?

actor212 November 20, 2012 at 10:32 am

In fairness, man, he's dealing with accountants all day. That's not exactly the kind of woman who's out there glamming up and meeting hot guys.

tiredalways November 20, 2012 at 10:02 am

tl;dr – Capitalism at its best!

EatsBabyDingos November 20, 2012 at 10:04 am

Needz moar hanging in effigy.

tiredalways November 20, 2012 at 10:04 am

If you can't hire your friend's daughter right out of college, what the point of being SEC Inspector General anyway?

actor212 November 20, 2012 at 10:06 am

If you can't hire bone your friend's daughter right out of college, what the point of being SEC Inspector General anyway?

FTFY

Botlrokit November 20, 2012 at 10:12 am

If you can't hirebone your friend's daughter right out of college, and everyone else in your office, what's the point of being SEC Inspector General anyway?

et tu!

Negropolis November 20, 2012 at 10:04 am

Never has the definition of "strange" made more sense than when I viewed that picture. Strange, indeed. It couldn't be anything other than strange.

actor212 November 20, 2012 at 10:05 am

like this pretty lady

I'd do her like a Picasso

Vecchiojohn November 20, 2012 at 10:23 am

During his blue period, no doubt.

actor212 November 20, 2012 at 10:30 am

At some point, her knees end up behind her head, is what I'm saying.

thatsitfortheother1 November 20, 2012 at 10:32 am

Both on the same side of her head?

actor212 November 20, 2012 at 10:33 am

It's happened.

BaldarTFlagass November 20, 2012 at 10:05 am

That crazy Benny Hill music was playing in my head the whole time I was reading that.

Terry November 20, 2012 at 10:15 am

How is it that enforcement of rules varies so much between Federal agencies?

At some Agencies, they have been trying to ban smart phones in the federal buildings (rotsa ruck with that) while at the SEC, they're handing data to hackers at a hackers convention.

HistoriCat November 20, 2012 at 10:30 am

Because free markets are the bestest thing ever and anyone who has any connection at all to the stock market should be left alone. OK, the SEC is a governmental entity (ew!) but since they interact with the job creators, we should govern with a light hand.

Tealiban November 20, 2012 at 10:06 am

And this is why we need to deregulate, right now! Uh I think…

Goonemeritus November 20, 2012 at 10:06 am

Sure some of this looks bad but thanks to the natural ability of financial markets to regulate themselves what could really go wrong?

paris biltong November 20, 2012 at 10:13 am

Right. Didn't we ultimately catch Madoff, after all?

paris biltong November 20, 2012 at 10:07 am

Safe SEC is not always good SEC.

Botlrokit November 20, 2012 at 10:07 am

Sounds like the Securities and Exchange Commission should be called the SEX.

thatsitfortheother1 November 20, 2012 at 10:35 am

I had a mutual fund that was SEXX, but thankfully I didn't get screwed.

PubOption November 20, 2012 at 10:07 am

A former drug dealer would probably be an asset to the SEC. He would know which traders were doing coke, and might have some idea about the strippers.

SorosBot November 20, 2012 at 10:11 am

I think we all know which traders are doing coke; it's all of them, Katie.

sati_demise November 20, 2012 at 3:44 pm

And could send some money laundering business to the banks!

actor212 November 20, 2012 at 10:08 am

Look, SEC, when we said we wanted you boning up on the job, we meant studying the companies who might have been defrauding us….

ChillBill November 20, 2012 at 10:08 am

What else did you expect from the Sex Exchange Commission?

not that Dewey November 20, 2012 at 10:14 am

I can't wait until Obamacare starts establishing Sex Exchanges in every state.

ChillBill November 20, 2012 at 10:17 am

Sex Panels, also.

OneDollarJuana November 20, 2012 at 10:19 am

Too bad for exhibitionists that there is no "public option".

PuckStopsHere November 20, 2012 at 10:09 am

"The integrity of the Stock Market." Now THAT'S funny.

Negropolis November 20, 2012 at 10:09 am

When Weber questioned the SEC examiners as to why they would bring their laptops, containing extremely sensitive information, including the architecture and trading engines of the major stock exchanges, to the Black Hat Conference, they replied

…porn. The end.

Botlrokit November 20, 2012 at 10:09 am

During the 2008 [Black Hat] Conference [in Las Vegas], a thumb drive that was passed around by attendees was found to contain a computer virus.

Bet that wasn't all that came home with a virus.

LibertyLover November 20, 2012 at 10:24 am

Are you saying that what happens in Vegas doesn't always stay in Vegas?

Botlrokit November 20, 2012 at 10:40 am

…or "what happens in the office eventually comes home."

Tundra Grifter November 20, 2012 at 10:59 am

Some times it stays with you for years…

Misty Malarky November 20, 2012 at 10:10 am

Geez, don't any of these goobahs have gaybuttsex any more?

FlipFlopFuck November 20, 2012 at 10:14 am

Do you mean buttSEChs?

Misty Malarky November 20, 2012 at 10:19 am

Indeed.

It's so easy, too.

P-E-N-I-S goes into the anus, and off you go.

FlipFlopFuck November 20, 2012 at 10:42 am

Wriggling in excrement.

Vecchiojohn November 20, 2012 at 10:10 am

I used to work at a huge law firm where the asshole quotient was through the roof, but biggest shits, pound for pound, were always the securities lawyers.

Tundra Grifter November 20, 2012 at 11:00 am

Do you think they were frustrated they hadn't gone over to The Dark Side and made fortunes working for investment banks, telling them how to get around the laws, rules and regulations?

SorosBot November 20, 2012 at 10:11 am

"we’ll just hope that none of this stuff is true and all this personal financial information — as well as the integrity of the stock market — is ok."

Silly Wonkette the grand Wall Street casino has no integrity.

mrpuma2u November 20, 2012 at 10:11 am

Wow my faith in capitalism is restored. Seriously, what a bunch of incompetent fucktards. Fire them all, and give someone who wants to WORK (vs post on some snarky website) a job.

Negropolis November 20, 2012 at 10:12 am

The Invisible Hand of the Market is pretty frisky, no?

You want a job, don't you?

LibertyLover November 20, 2012 at 10:23 am

Does that make it an Invisible Hand Job?

Tundra Grifter November 20, 2012 at 11:01 am

Just because she can't see it doesn't mean she can't feel it.

Negropolis November 20, 2012 at 9:49 pm

That's what she said.

Tundra Grifter November 21, 2012 at 9:17 am

I have been asked "Why would a boy think just because he is kissing a girl she doesn't know what his hands are doing?"

MosesInvests November 20, 2012 at 10:12 am

Needz moar Invisible Hand.

Terry November 20, 2012 at 10:12 am

"Many of these employees, like [a] contractor involved in [a sexual] assault [on SEC property]"

WTF?

The SEC sounds like a badly run frat house.

boskolives November 20, 2012 at 10:13 am

Oh crap, I read through all that stuff only to find out it's just about a SEC lawsuit, I thought I was going to be reading a story about a butt-SECs lawsuit.

CapeClod November 20, 2012 at 10:13 am

Let me guess. The 23 year old's degree was in Art History.

LibertyLover November 20, 2012 at 10:22 am

Fashion Merchandising?

actor212 November 20, 2012 at 10:35 am

Philosophy?

HistoriCat November 20, 2012 at 10:48 am

Communications.

TheGrandInquisitor November 20, 2012 at 12:30 pm

Every time.

Negropolis November 20, 2012 at 9:50 pm

English Lit

not that Dewey November 20, 2012 at 10:15 am

Does anyone else find it disturbing and/or ironic that it seems as though everyone and his brother is having more sex triangles than the perverts and dick joke enthusiasts of Wonkette? Pythagoras weeps.

Negropolis November 20, 2012 at 10:21 am

I know, right? Are we just to assume that every government worker in every department and agency is having sex with each other? Sweet baby jeebus, these guys are seeing more ass than a Hollywood casting couch.

BaldarTFlagass November 20, 2012 at 10:41 am

As a government worker, let me assure you that I wouldn't fuck more than about 10% of my female coworkers, with someone else's dick even.

actor212 November 20, 2012 at 10:21 am

Are we counting masterbation?

not that Dewey November 20, 2012 at 10:23 am

Triangles?

actor212 November 20, 2012 at 10:35 am

What? You've never done a circle jerk??? You post here, dontcha?

Blueb4sinrise November 20, 2012 at 10:31 am
FlipFlopFuck November 20, 2012 at 10:44 am

Wee-Wee the People!

BaldarTFlagass November 20, 2012 at 10:15 am

I guess that in order to specialize in securites law, there is a class you have to take called "Pelvic Thrust?"

dr_giraud November 20, 2012 at 10:16 am

Seems like everybody at the SEC was getting a reach-around from the invisible hand.

SorosBot November 20, 2012 at 10:16 am

We hope the integrity of the stock market is OK? But Wall Street has no integrity in the first place.

SorosBot November 20, 2012 at 10:21 am

"Some of the computers at issue … exposed exchanges to infections "

Just like Kotz did to the SEC's personnel. Allegedly.

boskolives November 20, 2012 at 10:21 am

It seems the lady in the photo is an Indian woman named Ms. Kachroo, so we should say a collective "Gehzunteit".

Biff November 20, 2012 at 10:55 am

Please. This is wonket.

It's goesintight.

thatsitfortheother1 November 21, 2012 at 3:22 am

Comes out loose.

Tundra Grifter November 20, 2012 at 11:02 am

You beat me to it! I was going with:

"Gaytri Kachroo."

"Bless you!"

LibertyLover November 20, 2012 at 10:21 am

It's good to know that our Stock Market is just as secure as the electronic voting system.

boskolives November 20, 2012 at 10:26 am

I thought I was buying stock in GM but I got 500 shares of Bain Capital, WTF?

Chow Yun Flat November 20, 2012 at 10:24 am

SEC spent approximately $4 million dollars relocating the desks of around 1,750 SEC employees.

At $2,285 per desk the SEC must have gotten the real gold standard of relocation services.

MosesInvests November 20, 2012 at 10:37 am

Who the hell do they think they are-the Pentagon?

Tundra Grifter November 20, 2012 at 11:35 am

WADR, I think that's sloppy reporting. Some of us remember what was like to work in an office – chance are there were also cublicles to be moved, wires changed, HVAC work, and various other items as well as desks, chairs, filing cabinets, etc.

Often the work is done on nights and weekends. Also.

CapeClod November 20, 2012 at 10:25 am

That's it. I'm starting a desk moving company. Sounds like a license to print money.

NorthStarSpanx November 20, 2012 at 12:36 pm

Sarah Palin's ex brother in law is an office environment consultant. To not have landed such lucrative dills in Rill Amercia, I think he's not doing it right.

LibrarianX November 20, 2012 at 10:26 am

I thought the SEC's mission was fucking all of us.

Tundra Grifter November 20, 2012 at 11:36 am

No, I think it's more making sure the fuckers have free reign over the fuckees.

Joshua Norton November 20, 2012 at 10:26 am

Also, at one time, a 23 year old recent college grad, with no experience in security, was possibly hired by the Chief of Security to oversee physical security at the SEC:

See Exhibits A,B,C and double D.

BaldarTFlagass November 20, 2012 at 10:26 am

I went over to the Rolling Stone article that was linked, but ended up clicking on the "40 Best Led Zep Songs Evah" link and reading that instead. Really, "Whole Lotta Love" at Number One? For me its a tossup between "Kashmir" and "Achilles' Last Stand."

actor212 November 20, 2012 at 10:36 am

The best Led Zep song ever. That's kind of like The Best NY Jets QB of All Time, or The Smartest Teabagger.

Tundra Grifter November 20, 2012 at 11:37 am

Broadway Joe libel!

imissopus November 20, 2012 at 12:33 pm

Excellent choices. We also would have accepted When The Levee Breaks and Hey Hey What Can I Do. And Tangerine.

thatsitfortheother1 November 20, 2012 at 10:33 am

Well Kotze is vomit auf Deutsch…

PsycWench November 20, 2012 at 10:36 am

Gawd, why couldn't he keep his random boning confined to conferences where it belongs?

TootsStansbury November 20, 2012 at 10:38 am

Oh for Fucking's Sake.

delaney_blom November 20, 2012 at 10:41 am

The Black Hat Conference is no big deal, just a bunch of fuckin nerds.

Wanna go do blow and have an orgy on my yacht?

Tundra Grifter November 20, 2012 at 11:38 am

The James O'Keefe Gambit? Or gambol, as the case mightn't be.

Maman November 20, 2012 at 10:47 am

The SEC guys get screwed and so do we….

An_Outhouse November 20, 2012 at 10:50 am

blah, blah, blah, FUCKING!!, blah, blah, blah.

larrykat November 20, 2012 at 10:58 am

Gaytri Kachroo! Gesundheit.

Guppy November 20, 2012 at 11:09 am

This replacement employee was hired directly after college graduation, with no security experience whatsoever, and in violation of the Merit Systems principles for competitive service hiring.

Dammit, who do I have to fuck to get into that express-lane hiring, or do I need to have tits?

boskolives November 20, 2012 at 11:34 am

Minimum of two required, and they should not cover your navel.

Mahousu November 20, 2012 at 11:15 am

Gaytri Kachroo has to be the greatest name I've ever seen. I think I'm just going to go around saying "Gaytri Kachroo" all day.

decentcitizen November 20, 2012 at 11:33 am

What's the point in working a gov't job if they're gonna make you follow the law?

PhilippePetain November 20, 2012 at 11:34 am

Huh, this is the kind of stuff you would think would get worked out if the opposition party wasn't busy spending their time parading their tinfoil hats on Fox news 24/7.

Nostrildamus November 20, 2012 at 12:25 pm

Put this guy in charge of Hostess – stat.

ttommyunger November 20, 2012 at 12:46 pm

If Justice follows its usual course, the alleged offenders will all be promoted and the whistleblower will do a hefty prison sentence for, oh, I don't know, Mockery & Gawkery, Severe Mopery or some-such.

HouseOfTheBlueLights November 20, 2012 at 1:22 pm

"50 to 100 SEC contractors were employed at the SEC without any background screening due to backlog"

I teach figure skating part time (like 5 hours per week). For this privilege, I have had to undergo FIVE count 'em FIVE background screenings, which I had to pay for. So if anyone at the SEC needs figure skating lessons, they can call me. I'm covered.

oldedinvn November 20, 2012 at 2:21 pm

I am jealouse. I am a dolt what dint not know how easy it is to get laid if I had decided to serve my fallow humans.

RalphCrown November 20, 2012 at 2:47 pm

Remember there's a revolving door between the SEC and Wall Street. So you can bet these kinds of shenanigans happen at the trading houses all the time. The difference is, you make enough money to buy your way out of trouble.

sati_demise November 20, 2012 at 3:48 pm

This is the same SEC that was charged with porn addiction, massive amounts of computer time wasted watching porn at their new desks.
Maybe it was a privacy issue, moving desks so they could watch their porn with some privacy.

BZ1 November 20, 2012 at 10:17 pm

A hacker convention, no kidding, it would be like a feeding frenzy when the SEC unsecured laptops showed up.

thatsitfortheother1 November 21, 2012 at 3:19 am

You've got talent!

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