WikiLeaks Worse for SEC Than Bank of America

Probably the best capsule description of the Securities and Exchange Commission came from journalist Chris Byron, who wrote in the New York Post some years ago that the media was the SEC's "seeing eye dog." It was a deliciously accurate phrase, with its imagery of the SEC as blind and clueless, reacting to publicity and lacking in information.

I thought back on Byron's dissing of the SEC as I contemplated what has the potential of being the biggest embarrassment to hit the SEC since Bernie Madoff: The disclosure that WikiLeaks would be releasing a "megaleak" of documents from a major U.S. bank. Word of that emerged in a Forbes article this week, and it quickly became apparent that the target would likely be Bank of America (BAC).

WikiLeaks is a ridicule machine. Look how it embarrassed the hell out of Amazon (AMZN) by doing nothing more than being a customer of Amazon's Web services. Amazon showed that it was yellow as a moonlit beach by kicking WikiLeaks off its servers at the first sign of trouble.

WikiLeaks founder Julian Assange seems to enjoy humiliating the rich and powerful, bless his heart, though he hasn't actually done anything about Wall Street. He told ComputerWorld in October 2009, that "at the moment, for example, we are sitting on 5GB from Bank of America, one of the executive's hard drives." It's a bit of a stunner that nobody noticed this bombshell back then, which I'd blame on ComputerWorld not recognizing its scoop (talk about "burying the lead"!) and Assange's lack of credibility at the time. But when the market took notice, the stock dived, forcing Bank of America to issue a statement saying it had "no evidence to support" Assange's assertion.

Translation: Get ready for a megaleak about Bank of America.

So the next question is, what impact will there be from this revelation of what Assange describes as the "ecosystem of corruption"?

The first is that I think that Assange's description of the data in his possession as being sufficient to "take down a bank or two" has to be taken with a grain of salt. Assange is not above overhyping his revelations -- the release of diplomatic cables, while significant, has not entirely lived to the pre-release hullaballoo. More importantly, Assange, in making that kind of claim, clearly doesn't understand the Teflon-like qualities of our major banking institutions. Every U.S. school child knows nowadays that our big banks are "too big to be taken down."