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May 17, 2009
The Facts
Florence Harmon is the deputy secretary of the Securities and Exchange Commission (SEC). In her position she is expected to be one of the top watchdogs policing Wall Street to insure they are not stealing America’s money. However, it appears she has used her position in an attempt to enhance her family’s wealth.
The Washington Post reported that Harmon “attempted to intimidate and influence” a family member’s broker on multiple occasions by invoking her position”. The report also says Harmon yelled at a Morgan Stanley broker and informed him of her position at the SEC, thus implying that if the broker didn’t satisfy her wants she could make life hard on him. The broker said she was trying to “bully him”.
Evidently, an investigation by the SEC’s inspector general’s office into Harmon’s actions has been going on for two years.
Harmon has held her position since November 2006. Prior to being appointed as deputy secretary she was employed by a law firm in Tampa, Florida where she represented brokerage firms, financial institutions, corporations, and their associated persons in securities litigation.
My View (and some more facts)
Florence Harmon is not the only person in the SEC that is being investigated. Several other employees seems to have been selling and buying stocks based upon SEC investigations being opened and closed with certain companies. But what can we expect from the underlings when their superiors are setting the example?
Harmon went into her government job overseeing an industry that she once represented, just as many appointees do under every administration. It’s as if each administration feels obligated to repay certain people by making them watchdogs over the very industry they had been protecting before. In other words, ‘you know the ins & outs of that industry, so it shouldn’t be hard for you to use your position to enhance your future and wealth’. As mentioned, these things happen under every administration, but that appears to have been taken to new heights under the last administration. And why not? The top two offices in the country were setting the examples to follow.
The greed for personal wealth has always existed in certain elements of our government. I’m sure no one can say exactly when, but there came a time when the silently accepted rule among the majority became ‘to hell with the people, it’s all about me’. So everyone started jumping on board the already overloaded ‘screw-the-people’ train. Today the line of applicants is long and they’re all screaming ‘pick me, pick me — it’s my turn to do it!!
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The greed for wealth exists in and any government, corporation, or individual. There is not full-proof way to ensure that there is no corruption or unethical and unfair practices.
I am not a Florence Harmon fan. In fact, I find her behavior a mockery. You posed the idea in your second to last paragraph that there is a fundamental weakness with the current system of regulation. You argue that much manipulative practices are possible because one knows the ins and outs of the industry, and thus it is not hard to use one’s position for personal gains.
This is the industry and this is the way it works. What would you suggest? How else can you regulate something unless you “know the ins and outs” of that industry? Shall we then invite Angelina Jolie or Mr. Rogers become securities regulators?
The only way one can regulate a given industry is if one understands the industry. One cannot understand the industry unless one has been in it and experienced it. It’s just the way it works. However, if we want to prevent corruption and unethical practices, the best way (in my opinion) is to implement effective checks and balances.
Complaining about our current system will not change anything. Perhaps you have suggetions and/or ideas to improve our current system.
Ms. Harmon has been with the SEC since 1997. She has spent that time working tirelessly to ensure that regulations were written properly to enforce and ensure ethical and fair trading practices. She put in many, many long hours during that time and has the highest ethical standards. The article referenced herein was presented as salaciously as possible, and lumped her actions with unrelated investigations. It should be noted that there were never any allegations of personal profit from her actions.
Indeed, while referencing her position at the SEC in dealings with her mother’s broker may have been poorly handled, I can attest that Ms. Harmon was not attempting to profit personally, but simply ensure that her mother’s relatively meager investments were being properly administered.
With all things, we must look beyond the quick and easy judgments, and realize that the expertise and actions of a lifetime should be considered before rendering a verdict.
Thank you.
For The Other Side, thanks for your comment. However, I feel you’ve miss my point. I never questioned Florence Harmon’s hard work or long hours. I question the use of her high-ranking position to either help herself or someone in her family. Many ordinary Americans have invested and lost money with their brokers. Some of those losses were due to natural market movements; some were due to bad management. The difference between Ms. Harmon and the rest of us is that we don’t have the clout to intimidate someone into “fixing” our problem.
Mr. Harmon is an appointed government official. As such, she is supposed to be working for the American people, and maybe she is most of the time. However — using her position to take advantage of personal matters is not acceptable. It seems as though many of us think this type of behavior is the accepted norm for our officials — maybe even a perk. But it is not accepted; at least not by everyone