US Feds scour Wall Street party circuit for finance offenders

The drinks were flowing in Miami Beach that evening when Wall Street’s top cop crashed the party.

As dealmakers crowded around the sleek circular bar at the Fontainebleau hotel in Miami last September, folks from the Securities and Exchange Commission were mingling, looking for their next big case.

Awkward, yes — but not uncommon these days. The SEC has been moving in on the Wall Street conference circuit in hopes of getting a handle on who’s up to no good in the world of finance.

Officials scour attendee lists to spot the biggest players in advance and, properly wearing name tags, schmooze over drinks. Of course, they don’t accept any — that’s a no-no under SEC policy.

The SEC isn’t the only regulator trawling conferences for tips of suspicious conduct. The Commodity Futures Trading Commission was especially transparent about its intentions when it set up a booth in the middle of an industry gathering in March.

Attendees at the opulent Boca Raton Resort & Club in Florida were greeted by smiling agency officials handing out metal whistles emblazoned with “CFTC” and mouse pads advertising their toll-free number.

The efforts show how regulators are trying to step up their game after missing Bernard Madoff’s Ponzi scheme and facing criticisms that they didn’t spot Wall Street abuses that led to the 2008 financial crisis.

“You have to credit the SEC for trying to understand what’s actually happening in the market,” said Pat Smith, a former federal prosecutor and partner at Smith Villazor in New York.

“There’s been a lot of criticism over the years that there’s a lack of sophistication about markets and industry practice,” he said.

The SEC has focused on bond conferences including ABS East and ABS Vegas. The four-day conferences bring together investors and originators of debt backed by everything from car loans to jewelry.

Kevin Callahan, an SEC spokesman, declined to comment as did Caitlin Fitzpatrick for Information Management Network, the conference organiser.


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