Long Island Congressional Candidate Cited for Giving Up JPMorgan Whistleblower, Peter Sivere.

""George Demos is a Republican Congressional Candidate from Eastern Long Island whose Web site bears the slogan "Fighting for Freedom," and touts his service as an enforcement lawyer in the New York office of the Securities and Exchange Commission. A bio says that he "handled some of the SEC's most significant investigations," including that of Ponzi scheme artist Bernard Madoff, and "worked tirelessly on the cases that never made the headlines."

But one case that never made headlines was his own: Demos' campaign Web site and public statements omit any reference to a report last March of the SEC's Inspector General (IG), which found he had improperly disclosed protected, nonpublic information about a whistleblower to the counsel for that whistleblower's employer, a major Wall Street bank, JP Morgan Chase.

The IG's charges of misconduct grew out of an SEC probe that began in 2003 of JPMorgan and other big financial institutions suspected of illegal market practices.

Demos has denied he did anything improper, and his campaign declined to comment on the matter. But documents obtained by the Project On Government Oversight (POGO) -- a non-partisan non-profit based in Washington -- confirm that Demos was the staff attorney who was cited in the IG report for violating SEC rules.

The IG referred the case to the agency's management for possible disciplinary action, but the SEC took no action. Soon after that, Demos quietly resigned from his job and launched his bid for a seat in the House of Representatives.

But the confidential information that Demos disclosed was used by a JPMorgan lawyer against one of the bank's own employees, a whistleblower who had alerted the SEC to possible wrongdoing by his employer, according to the report and other documents, some released under the Freedom of Information Act.

The significance of the case goes beyond politics.

In response to widespread public anger over Wall Street abuses and a weak economy, the SEC and its latest chairman, Mary Schapiro, have pledged repeatedly to protect whistleblowers and pay more attention to their reports of illegality and market abuse.

The Madoff case itself involved a whistleblower whose information the SEC had largely ignored, and a financial analyst at a prominent Wall Street company said last year that he, too, had trouble getting phone calls returned by the SEC after informing the agency his employer might be breaking the law. In response, the SEC has launched a program to cope with the hundreds of thousands of tips it receives every year, but progress has been painfully slow.

Meanwhile, the SEC also appears to be brushing aside or delaying action on the recommendations of its own IG, and not just in the Demos matter. In response to a recent Freedom of Information Act request submitted by POGO, the SEC has said that since 2007 there have been more than 200 recommendations from its IG on which the agency has either taken no action, or on which action was still pending.

Demos is a 33-year-old politically wired attorney who attended Fordham Law School. According to his campaign Web site, his donor list includes wealthy Wall Streeters and others, who have given him more than $300,000 since October.

His bio includes stints in the District Attorney's office in Suffolk County, Long Island, and service as enforcement lawyer at the SEC from 2002 to 2009.

He was involved in the campaigns of former New York Gov. George Pataki and former Sen. Alfonse D'Amato, and is now in a field of candidates, including Chris Cox, an attorney and the grandson of former President Richard Nixon, who are seeking the GOP nomination in New York's 1st Congressional District, a swing district. The seat is currently held by Tim Bishop, a Democrat, who is considered vulnerable in November.

The SEC IG's findings did not identify Demos by name when they were included in the watchdog's semi-annual report to Congress last year. But documents obtained by POGO, including internal SEC materials and related correspondence, make clear that Demos' conduct lay behind the section of the report on the JPMorgan whistleblower, who worked as a mid-level compliance officer in New York.

According to a redacted version of the report, the whistleblower, whose name is Peter Sivere, first came to the SEC with what he described as "confidential" evidence of the bank's alleged failure to disclose material sought in the SEC probe.

The SEC was investigating a practice known as market timing, which can be illegal. It typically involves trading that favors short-term buyers and sellers to the detriment of long-term shareholders like retirees.

After the whistleblower's initial e-mail contact with the SEC in June 2004, Demos replied to him, confirming, among other things, that the agency's probe was "confidential."

Several major institutions, such as Bank of America and Alliance Capital Management, later reached settlements in similar SEC inquiries, but JPMorgan was never charged with a violation, and this week had no comment.

In July 2004, Sivere brought an employment claim against JPMorgan before the Occupational Safety and Health Administration. He contended that the bank began threatening his job after he had gone to the SEC. JPMorgan strongly disputed Sivere's allegations.

OSHA issued a preliminary finding in favor of the whistleblower, saying there was "reasonable cause to believe" that he had faced retaliation, and that his "preliminary reinstatement" was warranted. Not long after, Demos informed JPMorgan's counsel that Sivere had initially sought a cash payment from the SEC for information he was offering the agency, apparently in hopes of benefiting from a well-publicized SEC program to elicit information from tipsters.

The lawyer for JPMorgan then used Sivere's confidential request for a bounty to question his whistleblower credentials, and informed OHSA that he had asked for money. Apparently concerned that this had damaged his case, despite the initial finding in his favor, Sivere then dropped his complaint against JPMorgan and settled the case.

A well-known Washington securities lawyer who did not want his name used in a discussion of the sensitive case explained that "whistleblowers are often unfairly disparaged for requesting payments, even though U.S. law specifically authorizes rewards to certain informants." JPMorgan has denied any impropriety. It ultimately fired Sivere in October 2004.

In October 2008, the SEC's IG launched its own investigation in response to information from Sivere. Its final report provided a description of what it said was Demos' improper disclosure, as well as an earlier, internal SEC examination of the matter.

Demos, when first questioned by an SEC supervisor, "did not admit" to the improper disclosure, the IG report says, though he did concede he might have been responsible, saying he "did not remember."

Based on that inconclusive evidence, Demos' SEC superior drew no definite conclusion about whether Demos had made the disclosure. Even so, he formally "counseled" Demos in late 2005 about the importance of keeping protected information within the agency, the IG said.

The IG later interviewed Demos' SEC superior and others at the agency. The IG also contacted lawyers for JPMorgan, including one to whom the disclosure had been made. That lawyer readily identified Demos as the source of his information, according to documents.

As the IG report concludes, Demos "not only gave . . . JPMorgan permission to use the non-public information about an informant against him [in the OHSA proceeding], but actually encouraged such use."

The IG found that Demos' disclosure was a violation of SEC rules, which severely restrict the release of confidential information obtained in the course of an investigation.

The failure of Demos' campaign to let prospective voters know about any of these events may not be surprising, but only days after he launched his run for Congress on Oct. 13, 2009, candidate Demos sent a two-page letter rebutting charges of ethical misconduct in the SEC matter that had surfaced in another forum: the Departmental Disciplinary Committee of the New York State Supreme Court Appellate Division, which reviews and investigates ethical complaints against lawyers.

Upset that the SEC was doing nothing in response to its own IG's disciplinary referral, the New York ethics complaint naming Demos was filed by Sivere, the fired whistleblower. Demos' letter in response to that complaint argued that it was "entirely without merit."

The complaint has yet to be resolved, but could result in a finding of no wrongdoing or penalties ranging from censure to disbarment.

In his letter to the Supreme Court's Disciplinary Committee, Demos concedes that information about the whistleblower may have been released, but only in line with SEC "regulations and policies." Demos' statement appears to be at odds with the IG's finding.

His letter also attacks the protected status of the whistleblower's information, arguing that the one time JPMorgan employee "was owed no duty of confidentiality or loyalty by the Commission [SEC] or me" -- another statement that contradicts the IG's conclusions.

Michael Smallberg is an investigator at the Project On Government Oversight (POGO). Adam Zagorin is Journalist in Residence at POGO. POGO is a non-partisan, non-profit government watchdog group based in Washington, D.C.""

Source
http://www.politicsdaily.com/2010/01/28/long-island-congressional-candidate-cited-for-giving-up-jpmorgan/

I do not believe that the SEC even Tries to Check on Reports or Tips... I believe that the SEC, Mary Schapiro looks at who the "Names" and "Players" are and decides from there whether to look into it or not.. the Iviewit Trillion Dollar Stolen Patent Case Shows this VERY Well... as the SEC, Mary Schapiro knows full well of a Massive Shareholder Fraud and they DO NOTHING.. they don't even seem to acknowledge it has been reported...

more on the iViewit Stolen Patent at
www.Iviewit.TV and www.DeniedPatent.com

and More on Mary Schapiro Click Here

the Obama Administration Brags about new laws to protect Whistleblowers... Laws seem to be in place but in the Real World Whistleblowers are Treated as Criminals and their Lives are turned upside down...

Was Mary Shapiro - SEC Chairman a KNOWN Risk to Investors and Shareholders - What in Mary Shapiro's past SHOULD have been a Red Flag?

Securities and Exchange Commission - News Archives

"" [The Financial Meltdown]

President-elect Barack Obama's choice of Mary Schapiro as Chairman of the Securities and Exchange Commission may go down as his worst appointment.

Schapiro, in her capacity as President of NASD Regulation and later CEO of Financial Industry Regulatory Authority (FINRA), was directly responsible for ensuring that Bernie Madoff's firm, BLM Securities, obeyed federal securities laws.

Schapiro in her capacity as Commissioner and acting-Chairman of the Securities and Exchange Commission and later as President of NASD Regulation, has covered up more violations of federal securities law than Madoff has violated.

And yes, Bernie Madoff pulled off his scam when Schapiro was President of NASD Regulation and Chairperson of FINRA, which regulates NASD!

Schapiro never investigated Madoff, probably because Madoff was a powerful individual, a former Chairman of NASD.

I’m privy to this information because I was a trader on Wall Street many years ago. Beginning in 1991 I had written to Steven Lister, Senior Vice President of Compliance at the American Stock Exchange (AMEX).

I requested that, as a former member of the American Stock Exchange, I be granted access to my records.

The American Stock Exchange never replied.

Whenever I saw Lister, I asked him when he would grant me access to my records, Lister would simply state: "No."

Little background. Members of the board of AMEX had told other members that I had been evicted from AMEX for refusing to pass through a metal detector; in reality I had exposed the fact that another member of the Board had been apprehended with an unregistered pistol after he went through metal detectors at AMEX. I wanted to see whether the false information about me was in my AMEX files.

On July 26, 1993, I wrote to Mary Schapiro and requested that the Securities and Exchange Commission order the American Stock Exchange to permit me access to my files after Lister again refused to grant me access to my records. Of course this is a violation of federal securities laws, but that did not matter to Schapiro.

And SEC attorney, GayLa D. Sessoms, in a letter dated August 23, 1993 claimed "the Commission does not have the authority to compel the AMEX to produce records to you."

Schapiro knew that AMEX was a hotbed of illegal activity by the Italian Mafia-but Schapiro always looked to greener pastures.

I did not expect this lack of support from Schapiro. After all, I executed orders for Frost & Sullivan, a trading firm, on the floor of the AMEX.

When the inside trading scandal in Motel 6 was exposed –a foreign company was planning to bid on Motel 6, which was a nationwide chain of budget motels, but the information leaked and Frost & Sullivan traded illegally on it— I was investigated by the SEC.

I was the only individual who was connected to the three firms involved in this insider trading scandal that did not trade on Motel 6 insider information and thereby profit illegally. I was also the only individual who possessed knowledge of the extent of the insider trading in Motel 6 who was not subpoenaed by the SEC.

Why? Because according to Joseph Greenwald, a trader with another firm, who pleaded guilty to insider trading in Motel 6, James Breeden, at the time Chairman of the SEC, and Mary Schapiro, who was then an SEC Commissioner, had ordered the SEC to limit the scope of the investigation. The intent was to protect senior members of the AMEX and Bear Stearns who had knowledge of the Motel 6 insider information.

On September 13, 1993 I met with Assistant United States Attorney Frances Fragos (who later, as Frances Fragos-Townsend was to become George W. Bush’s Homeland Security adviser) at 1 Saint Andrew Plaza, in Manhattan, to discuss the Italian Mafia's penetration of the AMEX; the insider trading scandal in Motel 6; payoffs to AMEX Compliance Attorneys by the Italian Mafia; payoffs by the Italian Mafia to members of the Board of the American Stock Exchange; the theft of $500,000 by a vice president of the AMEX; the stock fraud at a company named PNF; involvement of members of the Board of the AMEX in the stock fraud at PNF; and, a host of other crimes.

I had first approached the FBI to expose these crimes and the agency then arranged for me to meet with Frances Fragos.

(When I showed Fragos the letter from Sessoms, she told me that Sessoms had lied and that in fact the SEC had the authority to order the AMEX to grant me access to my records.

I was convinced that the SEC and AMEX knew that once I obtained my records, I could have forced investigations that would have exposed other major crimes; yet I needed my records as a launching point).

Of course the SEC had powers over the AMEX.

For example, in 1977 the AMEX gave mild disciplinary sanctions against about 20 members for posting fictitious options trades.

The SEC overruled the AMEX disciplinary actions and suspended the 20 or so members of the AMEX involved in this fraud, including future members of the Board of the AMEX, such as William Silver, Louis Miceli, and Robert VanCaneghan..

In 1995 when Schapiro was a Commissioner of the Securities and Exchange Commission, a huge illegal trading scandal erupted at the AMEX.

Pat Schettino, a rogue trader and managing director of Spear Leeds and Kellogg, falsified trades; marked options positions; produced fictitious trading records; stole money from AMEX members; violated the net capital rule (the type of offense for which Ivan Boesky later went to prison); and, even entered trades at fictitious prices.

When I wrote numerous letters to the SEC and members of the Board of the AMEX about Schettino's illegal trading, he hired Eric Levine, an attorney at Proskauer Rose and sued me for defamation. The SEC did nothing; even after I had written to the SEC, including Schapiro, about Schettino's massive illegal trading.

By taking no action, the SEC countenanced Schettino's actions against me. The AMEX delayed investigating Schettino for years. Two attorneys for the AMEX, Steven Lister and Phil Axelrod, who were supposed to be investigating Schettino even taunted me about Schettino's defamation lawsuit and told me that they hoped that I would lose.

In 1998 NASD purchased the American Stock Exchange. At the time Schapiro was President of NASD Regulation, which was technically overseeing AMEX regulation.

Then in 1999 when Schapiro was President of NASD Regulation, major violations of federal securities laws at the AMEX were exposed in a seminal article, "Scandal On Wall Street," on the front page of Business Week and it was noted that Schettino had not been disciplined four years after he had violated federal securities laws. Schettino subsequently dropped his lawsuit against me.

Schapiro did nothing, but covered up these crimes. And what has all this have to do with Bernard Madoff, the Ponzi King? Madoff, like Schettino, had also produced fictitious trading records; falsified trades; and. stolen money.

Where was Schapiro, the nominal overseer of Madoff?

Now she is to become Chairman of the Securities and Exchange Commission?

(Schapiro did not return a phone message seeking comment; her aide said she was meeting with President Elect Obama in Chicago). ""

Source of Post
http://blackstarnews.com/?c=135&a=5221

Question: Mary Shapiro KNOWS of the Iviewit Technologies Inc. and is very aware according to what I have read.. about the implications to Shareholders that will be Billions upon Billions per Company in my Opinion. So when the SEC and Mary Shapiro Says she did not have prior Knowledge on the iViewit Scandal and all the Major Law Firms and Tech Companies involved.. ...

You Savvy Internet Investigators
will KNOW that she most Certainly DID...

How Come our Great Country is paying no attention to what seems in the above article to be decades of indescretions leading to Billions upon Billions and the Shareholders, Investors Seem to be the Ones to Take the Heat.. and Not Only is Mary Shapiro NEVER held Accountable, She is Constantly put back into some authoritative position that allows for the Same Over Looking of Tips - Not Looking into Facts and Creating or Shall I say ALLOWING huges Liabilities to Innocent Investors and Shareholders... ???

posted By
Crystal L. Cox
Industry Whistleblower
.... Got a Tip .. Email me at Crystal@CrystalCox.com
Investigative Blogger