The Case Of the Mysterious Flaming SEC E-Mail
UPDATED with e-mail excerpts, further SEC reaction at 9:27 p.m.:
NOTE: The Ticker initially decided not to publish the content of the e-mail discussed here because its source could not be verified. But after consulting with top editors here at The Post, we decided to publish excerpts of the e-mail that do not include personal attacks or allegations that cannot be proven at this point. Those excerpts appear below.
At 7:51 a.m. today, an e-mail was sent from the work account of Irene Gutierrez, senior counsel at the SEC's enforcement division to her boss, SEC chairwoman Mary Schapiro, a handful of SEC officials and several reporters, including The Post's Zach Goldfarb.
The e-mail is a four-page jeremiad railing against Schapiro's performance that also attacks the agency's inspector general, David Kotz. It obviously was written by someone with inside knowledge of the SEC.
"Your attempt to take credit for the Reserve Primary Fund case is another head-scratcher," the anonymous e-mailer writes. "According to you, the investigation would have dragged on for years without your intervention. Nothing could be further from the truth. That matter had been identified as a high priority matter by people you have thrown under the bus..."
But the e-mail was not written by Gutierrez, she told Goldfarb, when he called to ask if she had sent it.
She followed with an e-mail at 9:35 a.m.:
"I apologize to everyone who received this email," she wrote. "My blackberry was stolen and someone sent the message below. I did not author this email nor do I know who did. I have notified my supervisors and contacted the Security branch and they are in the process of shutting off the blackberry."
Whether Gutierrez wrote what would be a career-ending email about her boss -- to her boss and several reporters -- is almost beside the point.
The serious questions raised by this incident are two-part:
a) How did this e-mail get sent? It seems unlikely that such a lengthy document was typed out by thumb on a Blackberry then sent. More likely, it was written and then e-mailed to Gutierrez's Blackberry. Then it was forwarded from her account to the recipients. That means either Guiterrez's Blackberry was not secured (password-protected) or whoever forwarded the e-mail had access to Guiterrez's account. Further, this e-mail could have been sent even if Gutierrez's Blackberry had not been stolen, if someone simply hacked her e-mail account.
UPDATE: SEC spokesman John Nester told The Ticker moments ago: "We have determined that the e-mail was sent from outside the agency's network and that the originating e-mail address was spoofed."
This means that someone with computer programming knowledge was able to change their e-mail address to make it look like the e-mail came from Gutierrez.
Also, Gutierrez recovered her Blackberry, which turned out to have been misplaced, not stolen.
The SEC has not determined if the investigation into the origin of the e-mail will continue or if it will be treated like an anonymous tip, like the sort that comes from a whistle blower.
b) What does it say about staff morale at the SEC? Schapiro was appointed by President Obama. Kotz was appointed by former SEC chairman Chris Cox. Chafing between appointees and long-time bureaucrats is normal, and probably even necessary, in government agencies.
But remember, this is the agency that was painfully raked over the coals before Congress and in the media for failing to catch alleged $50 billion Ponzi schemer Bernie Madoff and then was mocked for its subsequent announcements of shutting down nickel-and-dime Ponzi schemes. The tone of this letter, which includes inside agency details, is anger. The e-mailer believes that Schapiro and her staff unfairly blamed former enforcement division head Linda Thomsen for failing to catch Madoff and then hung her out to dry.
UPDATE: The Ticker asked Nester if the SEC will investigate the charges put forth in the spoofed e-mail. "The SEC has a great staff of talented and dedicated professionals who are not going to allow anonymous comments to distract them them from their mission to protect investors and restore investor confidence in this agency," Nester said.
We recognize this is not an answer to our question, but it's the only answer we're going to officially get at this point.
- Elsewhere in the e-mail, an article in The Post was described as "chock full of lies and half-truths."
- Also: "Back to the Post story, you need to be careful not to say things that are demonstrably false. For example, saying that you 'began [your] career as an enforcement lawyer at the SEC' is a flat-out lie. I have been told that you never worked in the Enforcement Division at the SEC. Hopefully, that was a mistake by the reporter and not resume fraud by you."
- UPDATE: It was a mistake by The Post. Schapiro began her career in enforcement at the Commodity Futures Trading Commission, not the SEC. The Post will print a correction.
- UPDATE: In reference to the first excerpt regarding the Reserve Primary Fund case, Schapiro did not take credit for speeding up the case in The Post article. It quoted Schapiro telling investigators: "You need to speed [the case] up to light speed."
- The e-mailer criticizes SEC internal reviews: "Do you know that nobody -- not even the employees who are the subject of the reports -- has a chance to review or comment on the reports until after they have been issued (and, typically, leaked to the press)? What kind of a system is that? Criminals in the SEC enforcement investigations get more due process than the Commission's own staff -- why is that? The system is not only not broken, it's McCarthy-esque, so shame on you if you don't take steps to fix it immediately."
- The e-mailer also gives Schapiro some credit: "To be fair to you, I hear that the Enforcement staff appreciates the two policy changes that you initiated -- allowing formal orders to be approved by a duty officer and eliminating the pilot penalty program -- and you have received a lot of positive press for taking these steps, which goes to show that you don't need to do anything radical to have a positive impact (after all, as everyone knows, all you did was roll back the clock and allow the Enforcement Division to do business the way they used to.)"
"I'm sorry if it sounds like I'm being hard on you, but it's for your own good," the e-mailer continues. "You have the ability to be a good Chairman. If you concentrate on doing what's right, and stop worrying about what Congress and the press are going to do or say, everything will be fine."
June 9, 2009; 9:27 PM ET
Categories: The Ticker | Tags: Linda Thomsen, Mary Schapiro, SEC
Save & Share: Previous: Bank Of America -- and Taxpayers -- Paying Mozilo's Legal Bills
Next: Taxpayers to Take Big Ownership Stake in Citigroup
Posted by: n-tres-ted | June 9, 2009 5:02 PM | Report abuse
Posted by: lostinthemiddle | June 9, 2009 5:03 PM | Report abuse
Posted by: Frank Ahrens | June 9, 2009 5:19 PM | Report abuse
Posted by: n-tres-ted | June 9, 2009 6:19 PM | Report abuse
Posted by: Frank Ahrens | June 9, 2009 6:49 PM | Report abuse
Posted by: cavatellie | June 9, 2009 7:08 PM | Report abuse
Posted by: n-tres-ted | June 9, 2009 7:14 PM | Report abuse
Posted by: Patchie | June 10, 2009 11:56 AM | Report abuse
Posted by: n-tres-ted | June 10, 2009 4:50 PM | Report abuse
The comments to this entry are closed.