Breakdown: Just How Pervy Were the SEC Porn Fiends?

Preface: The SEC's pre-porngate image problems

"The SEC is a farce. And it's been a farce for a decade. ... We got over 1,000 felony convictions in the Savings and Loan debacle of senior insiders. We have zero today -- of any of the senior lenders in non-prime. That's just an astonishing thing. There have been no criminal charges yet in this crisis."

SEC = XXX

• 33 cases of SEC workers viewing porn between 2005-2010

• 12
  of those cases were found
  in 2008, at the peak
  of the financial crisis
• two
  additional cases of porn-viewing workers have been discovered this year

• » Serial offenders, rather than a porn-watching epidemic: A relatively small number of the SEC's staff (which numbered around 3,642 as of September 2009) were identified as porn-viewers, though many were senior staffers, and it's unclear whether every SEC employee who may have searched for porn was investigated. That calls for a dose of perspective: We're only talking about a little less than 1 percent of the financial regulator's overall ranks.
• » Other workplaces are actually pervier? ABC News has made note of a Nielsen study that says that 28 percent of all office employees look at porn. The study says that porn-watchers view sites at work for 13 minutes on average, and an hour and 38 minutes over the span of a month. ShortFormBlog thinks those numbers seem high, and also hopes its office wasn't one of those Nielsen studied.

How one determined smut-viewer took on the firewall

• 16,000 failed download attempts in a month

• 100
  number of failed attempts per day, made by this SEC accountant
  based on a five-day workweek
• 12.5
  average number of failed
  attempts per hour, based on an eight-hour workday
• five
  number of minutes,
  on average, between each failed porn-viewing attempt

• » And that's just when the firewall worked: Despite the accountant's many (many) failed attempts to access porn on the job, he still managed to find a lot of porn, which, the investigators' memo helpfully noted, was "very graphic" in nature.

More SEC porn-viewing highlights

• One STAFFER LITERALLY FILLED HIS COMPUTER WITH SMUT. This SEC porn downloader, a senior attorney, spent as many as eight hours a day looking at adult material. After managing to fill his hard drive with it, he then moved his porn-collecting to DVDs and CDs. He had BOXES of pornography. And he might not even be the most egregious offender:

• 1,800
  number of access denials for one woman who downloaded 600 pornographic images in a two-week period
• five
  number of hours another SEC official said he spent downloading porn each day; he would stay after work to view it
• two
  number of weeks one SEC employee waited after his starting date before beginning to download porn at work

The real problem: Too little to do?

• The SEC's oversight Efforts have decreased in the last 10 years. Despite the growing complexity of the stock market, the organization has employed indirect methods of regulation, including the oddly titled "consolidated supervised entities," in which the agency relied on companies to tell it what they were up to. And how'd that come about? Well, it started with a deregulation push near the end of the Clinton administration.

• Legislative limitations
  One of the laws that effectively de-clawed the SEC and helped enable the financial crisis was 1999's Gramm–Leach–Bliley Act, which limited what the agency could do to regulate a certain kind of derivative called a "swap." This part of the bill (and in fact the whole law) was largely pushed forward by Robert Rubin, who was then the Treasury secretary (and later Citigroup's CEO).
• Regulatory workarounds
  The SEC, limited in terms of how it could regulate the financial industry, came up with "consolidated supervised entities" in 2004 as a way to encourage voluntary supervision of investment firms Bear Stearns, Lehman Brothers, Merrill Lynch, Morgan Stanley and Goldman Sachs. It didn't work very well, and in the wake of the financial crisis, the SEC quickly jettisoned the concept.
• Clinton: "wrong" move
  In a recent interview, Bill Clinton said the stance his administration took on derivatives, based partly on advice he got from Rubin, was "wrong" and only worsened after he left office. "I think what happened was the SEC and the whole regulatory apparatus after I left office was just let go." Clinton has since backed off some, specifically clearing the ever-Teflon Alan Greenspan.

• » So, there you have it. Well, obviously, we don't want to make it seem like the SEC's bureaucrats just sat around all day and did nothing, but the argument can be made that their lacking the power to prevent the financial crisis can be linked to this lesser scandal. There's a joke here about idle hands that we're sort of pussyfooting around here. We'll let you finish it.