SEC and Pornography: Workers Spent Hours on Porn Sites Instead of Stopping Fraud | Hacker News Reader

SEC and Pornography: Workers Spent Hours on Porn Sites Instead of Stopping Fraud

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15 pointsanderzole31 comments

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You know it's funny all this comes out just as the SEC go after Goldman.

Not to condone porn-surfing, or supporting prostitution, but look what happened to Elliot Spitzer when he went after Wall Street fraud.

Take a step back, and a hard look, before piling on to this stuff. You may be being manipulated, in the easiest way possible.

The SEC just released two embarrassing reports: the porn report and the Stanford report. Just before releasing those reports, they made a press release about a high profile case which appears to be extremely weak.

You are right; the timing of these press releases does suggest we are being manipulated.

The Stanford IG report is amazingly damning; from memory, the SEC both determined he was running a scam and sat on that for years, and one of the guys who should have pursued him later became his attorney. Worse in many ways than Madoff.

That's just silly. Neither of those reports are threats to the SEC, and the SEC is not cohesive in the way a corporation is.

Now, you could make a case that the administration gave the SEC a nudge to file the Goldman case in the week before financial reform goes in front of Congress, in an election year. That would make a lot of sense.

This is your weekly episode of "examining basic incentives has much more deductive power than blindly applying ideological predispositions".

The SEC is comprised of people. These people might lose their job or future promotion opportunities if the SEC is embarrassed under their watch, or if their poor management becomes highly public. This gives them an incentive to time press releases to minimize the embarrassment.

By the way, why do you feel the SEC is not cohesive?

To start with, it's governed by a board of political appointees from both parties who fight with each other regularly and don't have a huge amount of shared agenda. They're typically going to have much more loyalty to their party than the SEC. Beyond that, the actual staffers don't "own stock" in the SEC. These things add up to something much less "cohesive" (for lack of a better word) than the effect you get when you put a dozen people who have 80%+ of their net worth in the same company in a room together.

Regarding your first point, about people -- yeah. But none of them has a particularly strong incentive to protect the SEC as opposed to themselves -- the SEC isn't a cohesive group in the sense of ideology or in the sense of a corporation. And even if they were, the porn story isn't worth launching a risky investigation over. Like I said, the Obama administration has a definite interest in pushing cases being filed in this particular 3-week window -- the SEC as an institution? Meh.

You'd be surprised how many government agencies and employees just plain don't have the hard-edged desire for nefarious political influence. Office politics, sure, that's their livelihood. Advocating their superiors to do things "the right way" as they see it? Sure, who wouldn't. But political influence to the tune of playing the media? They'd be in a political role if that was really what drove them.

Suppose the Porn/Stanford stories break. These are both big media-genic scandals.

Now the public widely perceives the SEC as incompetent/corrupt/perverts. Congresscritters declare that "something must be done", so they fire a few people, maybe do a reorg. Oh, and assorted SEC higher ups become known as "that guy who didn't catch stanford" or "that guy who didn't notice all the perverts in his office."

This gives all sorts of SEC officials a perfect motivation for drawing attention elsewhere.

As for launching a "risky" investigation, what's the risk? The case fails, and the public thinks the noble SEC was beaten by the evil vampire squid? The worst case I see from this is that congress decides the SEC needs more money/power. Oh noes!

Yes and no. After all, the SEC is chartered for the purpose of regulating. What would you have them do instead?

I guess your comment is ambiguous: are you saying that we're being manipulated into paying attention to this instead of the Goldman case? Or that the SEC threw together a really weak case against an unpopular company ("vampire squid"?) in order to distract from the highly embarrassing facts about what they weren't doing (arresting someone for fraud) and what they were doing (spanking it).

Spitzer had unprotected anal sex with whores a whole lot, but that doesn't have much to do with the fact that he bullied companies into settling by conflating illegal practices (e.g. price-fixing on a million-dollar insurance contract) with hard-to-understand industry standards (contingent commissions).

Well hang on, you're mad at the SEC because employees were slacking on the internet (breaking!) and they weren't going after the systemic fraud in the financial system..

Then you turn around and after a vulgar cheap shot, attack Spitzer for going after systemic fraud in the financial system?

I don't get it.

Here's the deal: The SEC has no incentive to launch a major bogus lawsuit over a rumored story-of-the-day that has absolutely no legs and that nobody will remember in a couple weeks. Thinking that they do presumes that A) there's an organized political arm of the SEC and B) said political arm is simultaneously smart enough to know about a report like this weeks ahead of time and dumb enough to misjudge this situation massively, damaging their brand worse by launching a bogus lawsuit to distract from a total non-story.

A defendant in a major lawsuit, on the other hand, absolutely has an incentive to try and turn the tables by virtue of something like this. The two are not equivalent.

EDIT: To clear up my point, I'd have absolutely no problem believing that part of the timing of the lawsuit was pushed by the administration to support the financial reform currently before Congress. That's an incentive that makes sense. "Oh no we were whacking it" does not.

What systemic fraud did Spitzer discover? His cases were all pretty ridiculous--he sued analysts for having second thoughts about their analysis; he went after insurance companies for a commission structure that everyone in the industry was aware of; he went after Dick Grasso merely for getting a large compensation package (one of the reasons executive pay has gone up so much is that the risk of getting sued by someone like Spitzer keeps rising, too).

I'm not sure why describing what Spitzer did is a vulgar cheap shot. If he didn't want people to say that he had anal sex with whores, he probably shouldn't have done it.

All organizations influenced by politics are to some extent politicized. If you ran the SEC, a taxpayer-funded organization, and you were aware that some stories would come out that made you look bad, you might be tempted to quickly throw together some case that made you look on the ball. They picked synthetic CDOs, which are a couple levels of abstraction away from what your average journalist can explain (much less from what the audience can understand). So you're pimping out non-news for easy outrage, in order to distract from the real news that your organization didn't go after someone whom they had reason to suspect was committing fraud, but did spend time on analsins.com.

You're still assuming that Goldman has more information than they had. The SEC said they were going after Goldman; Goldman didn't say that the SEC was full of well-paid porn addicts.

A defendant in a major lawsuit, on the other hand, absolutely has an incentive to try and turn the tables by virtue of something like this. The two are not equivalent.

Are you somehow suggesting that back in 2008, Goldman persuaded Sen. Chuck Grassley to demand an investigation into porn watching at the SEC? Somehow, back then, they knew that the SEC would make a press release about a weak case they were planning to file against Goldman? And they somehow managed to ensure that the porn report would come out only a week after the investigation into Goldman was released? And somehow, they also happened to know that the SEC was full of porn watchers who can't wait until they get home?

That's quite the conspiracy.

I suppose I'm saying that Goldman is much better motivated and better equipped to steer the narrative, congressmen and capture various regulators than the regulators are equipped to actually regulate Goldman. If you're going to apply a bias, I'd suggest that one.

As far as what I think Goldman's been doing with regard to the SEC, I'd assume that they have several very smart and well-funded people continually looking for opportunities to get leverage over anyone, any way. I wouldn't go so far as to allege they're the ultimate power behind this particular investigation, that could easily be explained by Grassley being a republican, he probably doesn't like the SEC to begin with.

The problem with your theory is that the SEC, not Goldman (or any other party possibly under the secret control of Goldman), controlled the timing of these reports.

Is the SEC Porn Story a New Problem, or Political Ploy?

http://www.propublica.org/ion/blog/item/financial-regulators...

This has nothing to do with the SEC in specific, but with workplace internet policies in general. It amazes me how many people have no idea that their internet usage at work is being tracked.

This just in: at almost every company with an internet connection, workers spent hours on porn sites instead of doing their job.

Wow! I mean, I work remotely, using my own laptop, and once in a while I'll look at porn while I should be working, and I always feel guilty about it. It's certainly not often, but I can't imagine how brazen one has to be to do this while at an office, on a company computer. Wow!

>Another SEC accountant attempted to access porn sites 16,000 times in a single month.

Honestly sounds like a computer worm. 16k accesses is 800 per working day, a little fishy sounding.

depends; if they are counting each http request, that probably reasonable.

I like "The employee also said he deliberately disabled a filter in Google to access inappropriate sites"

You mean: he turned off the safe search option. Given the rest of the content it seems odd to spin it so that changing an easy to alter option is made to sound like "hacking" but perhaps that is all being spun too!

an employee tried hundreds of times to access pornographic sites and was denied access. When he used a flash drive, he successfully bypassed the filter to visit a "significant number" of porn sites.

Huh? How does plugging in a flash drive bypass web filters?

Portable Firefox with Tor, or something like that.

http://www.torproject.org/torbrowser/

http://en.wikipedia.org/wiki/Portable_Tor

Good point, I buy that explanation.

IMHO, anybody who's carrying around TOR and using it to bypass an employer's filters so he can get to porn has a real problem.

Several years back, me and a coworker looked at the company's DNS servers, curious what names were cached. We were pretty horrified. I guess this kind of thing is pretty widespread, more than "outsiders" would expect -- particularly from a cubicle farm where there's no privacy.

At a job in college, a desk jockey ordered porn and used his work address on the purchase. He got caught when the sys admin came across the email w/his receipt in the spam queue. Though he wasn't fired (he did get chewed out) I couldn't look him in the eye after I saw the list of movies he purchased (they were largely she-male dvds).

Maybe they meant a wifi stick; I know people who use these to connect to other wifi hotspots from work.

I'm not surprised. A few weeks ago I found that around 60% of my University's bandwidth as tracked as going through porn sites. What have I been missing by not going to lectures??

This seems like just one particular case of:

<something> and Pornography: <people> Spent Hours on Porn Sites Instead of <something>

Don't blame the workers. Blame the boss.

That was a trillion dollar Oops!

Well that much is obvious.

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