SEC ain’t fit to be Wall Street’s cop So where’s the FBI?

For the last three years, a onetime New York City cabby named Michael Lauer has periodically ventured forth from his Greenwich, Conn., estate to thumb his nose at the U.S. government's fumbling efforts to bring him to trial for the biggest hedge fund heist on record.

Unfortunately, the wheel-spinning in the Lauer case is hardly unique. There has been an extraordinary slowdown in the prosecution of white-collar crime since 9/11 and serious reform is necessary in the policing of Wall Street to put things right.

Progress may in fact finally be made in the case of Lauer, a Ukrainian émigré who is named in a mountain of court documents as the mastermind behind the near-total looting of the $1.2 billion Lancer Group hedge fund empire. It collapsed in the spring of 2003, sticking investors with losses topping $600 million that will probably climb higher.

In Miami, where most of the government's efforts against Lauer have been based, a long-dormant criminal case has flared back to life with a savvy and seasoned new federal prosecutor named Harry Shimkat calling the shots.

And the SEC's own Miami-based drive to haul Lauer into civil court on federal fraud charges is starting to get in gear. Barring unforeseen circumstances or further foot-dragging by Lauer, opening arguments in the case are set to commence Feb. 20 in Miami.

Meanwhile in New York, startling new documents have begun surfacing in the Lancer affair, including some that came to light last week during discovery proceedings in a class-action suit by investors who hope to recover what they can by charging that officials at Bank of America, PricewaterhouseCoopers, and Citco Fund Services colluded with Lauer in his apparent looting of Lancer.

But by the time SEC investigators called around to ask questions, the fund's two top officials had already taken off on one-way flights to South Korea, leaving only the fund's head trader behind to explain. He did so by pleading his Fifth Amendment rights against self-incrimination to all 195 questions asked of him, including his name.

http://www.nypost.com/business/bring_in_the_fbi_business_christopher_byron.htm