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580 Notes to Chapter 9

141. Yuri Yoshizawa, interview by FCIC, May 17, 2010. The chart was labeled “Derivatives (Amer-
ica).”
142. Brian Clarkson, interview by FCIC, May 20, 2010.
143. Harvey Goldschmid, interview by FCIC, March 24, 2010; Annette Nazareth, interview by FCIC,
April 1, 2010.
144. Office of Thrift Supervision, letter to the SEC, February 11, 2004.
145. Lehman Brothers, Inc., letter to the SEC, March 8, 2004; J.P. Morgan Chase & Co., letter to the
SEC, February 12, 2004; Deutsche Bank A.G. and Deutsche Bank Secs., letter to the SEC, February 18,
2004.
146. Harvey Goldschmid, interview by FCIC, April 8, 2010.
147. Closed meeting of the Securities and Exchange Commission, April 28, 2004.
148. In 2005, the Division of Market Regulation became the Division of Trading and Markets. For the
sake of simplicity, throughout this report it is referred to as the Division of Market Regulation.
149. Erik Sirri, interview by FCIC, April 1, 2010. Although there are more than 1,000 SEC examiners,
collectively they regulate more than 5,000 broker-dealers (with more than 750,000 registered representa-
tives) as well as other market participants.
150. Michael Macchiaroli, interview by FCIC, March 18, 2010.
151. The monitors met with senior business and risk managers at each CSE firm every month about
general concerns and risks the firms were seeing. Written reports of these meetings were given to the di-
rector of market regulation every month. In addition, the CSE monitors met quarterly with the treasury
and financial control functions of each CSE firm to discuss liquidity and funding issues.
152. Erik Sirri, written testimony for the FCIC, Hearing on the Shadow Banking System, day 1, ses-
sion 3: SEC Regulation of Investment Banks, May 5, 2010.
153. Internal SEC memorandum, Re: “CSE Examination of Bear Stearns & Co. Inc.,” November 4,
2005.
154. Securities and Exchange Commission, Office of Inspector General, “SEC’s Oversight of Bear
Stearns and Related Entities: The Consolidated Supervised Entity Program,” Report No. 446-A, Septem-
ber 25, 2008, pp. 17–18.
155. Michael Macchiaroli, interview by FCIC, April 13, 2010.
156. Robert Seabolt, email to James Giles, Steven Spurry, and Matthew Eichner, October 1, 2007.
157. Matt Eichner, interview by FCIC, April 14, 2010; SEC, OIG, “SEC’s Oversight of Bear Stearns and
Related Entities: The Consolidated Supervised Entity Program,” p. 109.
158. Goldschmid, interview.
159. GAO, “Financial Markets Regulation: Financial Crisis Highlights Need to Improve Oversight of
Leverage at Financial Institutions,” GAO-09-739 (Report to Congressional Committees), July 2009, pp.
38–42.
160. Erik Sirri, “Securities Markets and Regulatory Reform,” remarks at the National Economists
Club, Washington, D.C., April 9, 2009.
161. Harvey Goldschmid, interview, April 8, 2010.
162. “Chairman Cox Announces End of Consolidated Supervised Entities Program,” SEC press re-
lease, September 26, 2008.
163. Mary Schapiro, testimony before the FCIC, First Public Hearing of the Financial Crisis Inquiry
Commission, day 2, panel 1: Current Investigations into the Financial Crisis—Federal Officials, January
14, 2010, transcript, p. 39.
164. The Fed remained the supervisor of JP Morgan at the holding company level.
165. Mark Olson, interview by FCIC, October 4, 2010.
166. Federal Reserve System, “Financial Holding Company Project,” January 25, 2008, p. 3.
Chapter 9
1. Warren Peterson, written testimony for the FCIC, Hearing on the Impact of the Financial Crisis—
Greater Bakersfield, session 3: Residential and Community Real Estate, September 7, 2010, pp. 1, 3.
2. Gary Crabtree, principal owner, Affiliated Appraisers, written testimony for the FCIC, Hearing on
the Impact of the Financial Crisis—Greater Bakersfield, session 4: Local Housing Market, September 7,
2010, p. 2.