Financial crimes can equal murder

See all Bernie Madoff posts.

Madoff Investor’s Suicide Leaves Questions
By ALEX BERENSON and MATTHEW SALTMARSH
New York Times
January 1, 2009

In the days after Bernard L. Madoff was arrested and accused of orchestrating a $50 billion Ponzi scheme, one of his investors — Rene-Thierry Magon de la Villehuchet — struggled with his role in the fraud.

Mr. de la Villehuchet, a French aristocrat and professional investor who lived in the New York suburbs, had put at least $1.4 billion of his and his clients’ money with Mr. Madoff. He had lost his entire savings. He was overwhelmed and depressed, according to people who had spoken to him.

Worse, he felt personally responsible for the money his investors had lost, his brother Bertrand said in a phone interview in Paris this week...





Ruth Madoff Reportedly Blames Bernie For Son's Suicide
PerezHilton.com
Dec. 14, 2010

...Ruth Madoff is reportedly blaming her husband, Bernie, for their son Mark's suicide.

Here's what Madoff biographer Jerry Oppenheimer had to say about it on The Today Show:

"She claims that Bernie Madoff has blood on his hands. She calls him an SOB … that he's totally ruined his family, and the death of their son was the final straw."

Oppenheimer has also said that Ruth feels that Mark "would not have died if it weren't for what [Bernie] had done."

And more from Oppenheimer:

"Her wrath is aimed at her husband." ...

Top Banks Paid $1.6 Billion in Excessive Bonuses, U.S. Finds

Top Banks Paid $1.6 Billion in Excessive Bonuses, U.S. Finds
Brendan Hoffman/Bloomberg News
July 22, 2010

In a report to be released on Friday, Kenneth R. Feinberg, the Obama administration’s special master for executive compensation, is expected to name 17 financial companies that made questionable payouts totaling $1.58 billion immediately after accepting billions of dollars of taxpayer aid, according to two government officials with knowledge of his findings who requested anonymity because of the sensitivity of the report.

The group includes Wall Street giants like Goldman Sachs, JPMorgan Chase and the American International Group as well as small lenders like Boston Private Financial Holdings. Mr. Feinberg’s report points to companies that he says paid eye-popping amounts or used haphazard criteria for awarding bonuses, the people with knowledge of his findings said, and he has singled out Citigroup as the biggest offender...

Goldman Sachs sold a portfolio without disclosing that this person designing it was betting against it

As I struggle to understand exactly how and why financial institutions inflicted so much damage on the American economy, I appreciate articles like this one from NPR.

Fresh Air
May 4, 2010

Today, a conversation with New York Times financial editor Gretchen Morgenson, who has covered the world financial markets since 1998. She'll be discussing what's going on with Goldman Sachs, the Justice Department, and the SEC.

...Ms. MORGENSON: What the SEC really is saying is that they have omitted a material detail in the selling of this security. Here's how it was created. It was created with a very big hedge fund that was a client of Goldman Sachs.

It was called the Paulson and Company Hedge Fund, and it was run by a man named John Paulson, who has subsequently become very famous for making billions of dollars betting against subprime mortgages when people were still sort of thinking everything was fine.

Now, he and Goldman put together this portfolio of mortgages that were then sold to Goldman's clients. But the element that is at the crux of the case is Mr. Paulson had interest in this portfolio being filled with sort of toxic mortgages, mortgages that were less likely to perform well, that were really sort of on the precipice already.

So was it right for Goldman Sachs to sell such a portfolio to its clients without disclosing that this person who was selecting the portfolio had a negative bet on and was therefore opposed to the people who were buying it, who were hoping that it would perform and that the mortgages would continue to pay?

GROSS: So the suit names Fabrice Tourre, who is a vice president at Goldman, who helped create and sell these derivatives. How come the suit doesn't name the hedge fund manager who helped create the derivative and then betted against it?

Ms. MORGENSON: Well, John Paulson, the hedge fund manager who is involved, did not have a duty to disclose to investors his role in it because he was not selling the securities...

Trying to avoid future crises in schools and the economy: we are now halfway to the goal of financial reform

The financial crisis has devastated schools and the economy--so why are Republicans fighting reform? Answer: campaign contributions. But it looks like a few Republicans care more about our economy and our democracy than they do about corporate lobbyists. Let's hope they stand firm.

The battle is only half won with the vote below in the House of Representatives. The Senate still has to agree.

This bill was hammered out less than a week ago in a marathon session.

See all posts re financial abuses.

House passes landmark financial reform bill
Andy Sullivan and Kevin Drawbaugh
Reuters
July 1, 2010

The House of Representatives on Wednesday approved a landmark overhaul of financial regulations but the Senate put off action until mid-July, delaying a final victory for President Barack Obama.

Still, the 237 to 192 vote in the House marked a win for Obama and his fellow Democrats, who have made the most sweeping rewrite of Wall Street rules since the 1930s a top priority in the wake of the 2007-2009 financial crisis.

"It has been a long fight against the defenders of the status quo on Wall Street, but today's vote is a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth," Obama said in a statement.

Analysts say Obama is all but certain to get the measure on his desk eventually, but Democrats' hopes of sending him a bill to sign into law by the July 4 Independence Day holiday were dashed.

The death of Democratic Senator Robert Byrd and cold feet among Republican allies has complicated efforts to round up the votes needed in the Senate. A week-long break following the July 4 holiday means the Senate won't act until the week of July 12, at the earliest..

Obama earlier on Wednesday accused Republicans of being out of touch with the American people for opposing reforms. Others echoed his line of attack on the House floor.

"Republicans have sided with big Wall Street banks at every opportunity," said Democratic Representative Luis Guitierrez. "If it helps Wall Street banks, they favor it, but if it helps Main Street and regular Americans, they won't vote for it."...

Financial Reform passed!/How did Scott Brown get to be in charge of bank reform?

Our financial system failed us in 2008. One of the biggest victims has been our school system. Why don't Republicans agree that we need financial reform?

UPDATE: Financial reform passed!

Lawmakers agree on historic Wall St reform at dawn
Charles Abbott and Andy Sullivan
WASHINGTON
Fri Jun 25, 2010
Reuters

U.S. lawmakers hammered out a historic overhaul of financial regulations as dawn broke over the nation's capital on Friday, handing President Barack Obama a major domestic policy victory on the eve of a global summit devoted to financial reform.

In a marathon session of more than 21 hours, legislators agreed to a rewrite of Wall Street rules that may crimp the industry's profits and subject it to tougher oversight and tighter restrictions.

To secure agreement, lawmakers reached deals in the final hours on the most controversial sections which restrict derivatives dealing by banks and curb their proprietary trading to shield taxpayer-backed deposits from more risky activities.

Banks will be allowed to keep most swaps dealing activity in-house, although the riskiest trading would be pushed out...




How did Scott Brown get to be in charge of bank reform?
As the fate of the Volcker rule is determined, the junior senator from Massachusetts may tip the balance
Andrew Leonard
Salon.com
June 24, 2010

...A senator sworn in five months ago owns the swing vote on the most important financial reform legislation in decades.

Brown's concerns are strictly parochial. On the one hand, he wants mutual funds and insurance companies exempted from the Volcker rule. Not uncoincidentally, such exemptions would apply to major Massachusetts-based financial institutions such as Fidelity and MassMutual...

U.S. drops criminal probe of AIG executives: Too big to go to jail?

See all AIG posts.

U.S. drops criminal probe of AIG executives
Christian Plumb
Sat May 22, 2010
Reuters

The U.S. Justice Department has dropped a probe of American International Group Inc executives involving the credit default swaps that sent the insurer to the brink of bankruptcy and forced a huge taxpayer bailout, lawyers for the executives said on Saturday.

The investigation had centered on AIG Financial Products, which nearly brought down the giant insurer after writing tens of billions of dollars on insurance-like contracts on complex securities backed by mortgages that turned out to be toxic.

The U.S. government stepped in with a $182 billion bailout to avert a bankruptcy filing by AIG.

The criminal probe had focused on whether Joseph Cassano, who ran the financial products unit, and Andrew Forster, his deputy, knowingly misled investors about the company's accounting losses on its credit default swaps portfolio...

The Wall Street Journal first reported on Friday that the two-year investigation, one of the highest profile of the various probes stemming from the 2008 financial meltdown, had been dropped.

The FBI and other government agencies had been looking into whether Cassano misled investors with overly optimistic forecasts about the extent of the firm's exposure to securities backed by risky subprime mortgages.

Investigators were said to have focused on a December 2007 investor presentation at which Cassano played down the market value of losses on the credit default swaps.

Over the course of the next year, AIG took writedowns of more than $40 billion on the swaps and had to put up billions more in collateral to counterparties like Goldman Sachs.

Cassano resigned under pressure in March 2008 as AIG's financial situation began to weaken...

Tourre emails show agony, ecstasy of being a banker

Tourre emails show agony, ecstasy of being a banker
By Alistair Barr, MarketWatch
April 26, 2010

Fabrice Tourre comes across as an arrogant investment banker in the Securities and Exchange Commission lawsuit against him and his employer Goldman Sachs Group Inc.

But personal emails released by Goldman /quotes/comstock/13*!gs/quotes/nls/gs (GS 151.93, -5.47, -3.48%) this weekend show Tourre struggling with "ethical questions" as he sold complex mortgage-related securities that he worried were suspect.

The SEC charged Goldman with securities fraud on April 16, alleging the investment bank didn't tell investors in a collateralized debt obligation that hedge fund firm Paulson & Co. helped structure the deal and was betting against it. Goldman and Paulson have denied wrongdoing. Read about the charges.

The SEC also charged Tourre, an executive director in Structured Products Group Trading, with securities fraud, alleging he was mainly responsible for the CDO, known as ABACUS 2007-AC1. Pamela Chepiga, an attorney for Tourre, declined to comment.

In the suit, the SEC quoted a January 2007 email that Tourre sent to a friend.

"More and more leverage in the system, The whole building is about to collapse anytime now...Only potential survivor, the fabulous Fab[rice Tourre]...

SEC staff surfed porn sites during crisis buildup: inspector

April 23, 2010
SEC staff surfed porn sites during crisis buildup: inspector
By Ronald D. Orol
MarketWatch

WASHINGTON (MarketWatch) -- As the 2008 financial crisis was developing, top Securities and Exchange Commission employees and contractors were using government computers on official time to view pornography, according to an SEC inspector general.

The SEC's inspector general found that 33 employees or contractors violated commission rules and policies by viewing porn, according to a memo obtained Friday by MarketWatch. The investigation was requested by Sen. Charles Grassley, R-Iowa.

The memo reported incidents by year:

*

2010: 3 so far
*

2009: 10
*

2008: 16
*

2007: 2
*

2006: 1
*

2005: 1

The 33 employees cited in the memo represent less than 1% of the SEC's approximately 4,000 employees. Of those employees, 17 were senior officials whose salaries ranged from $100,000 to $222,000, according to the memo. It isn't clear if the employees discussed in the memo were involved in oversight matters related to the financial crisis.

According to the memo, a regional office supervisory staff accountant admitted he frequently viewed pornography at work on his SEC computer for about a year and accessed pornography on his SEC-issued laptop computer while on official government travel.

Another regional office supervisory staff accountant admitted that he used an SEC assigned computer to access Websites containing pornography and other sexually explicit material during work hours fairly frequently, sometimes twice a day, according to the memo.

Another regional office staff accountant received 16,000 access denials for Internet websites classified by the SEC's Internet filter as "Sex" or "porn" in a one-month period. "In addition, the hard drive of this employee's SEC laptop contained numerous sexually suggestive and inappropriate images," the memo said.

A senior attorney at the SEC's headquarters in Washington admitted accessing Internet port so frequently that, according to the memo, on some days, he spent eight hours accessing Internet porn.

"In fact, this attorney downloaded so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office," the memo said.

Rep. Darrell Issa , R-Calif., the Ranking Member of the House Committee on Oversight and Government Reform, said he was disturbed by the findings.

"It is nothing short of disturbing that high-ranking officials within the SEC were spending more time looking at pornography than taking action to help stave off the events that brought our nation's economy to the brink of collapse," he said in a statement. "This stunning report should make everyone question the wisdom of moving forward with plans to give regulators like the SEC even more widespread authority. Inexplicably, rather than exercise its existing regulatory enforcement authority, SEC officials were preoccupied with other distractions."

Ronald D. Orol is a MarketWatch reporter, based in Washington.

Obama to Wall Street: ‘Join Us, Instead of Fighting Us’; Steve Schwartzman doesn't get it

This related story seems an apt introduction to Obama's words:

Wall Street's know-it-alls can't tell right from wrong
By Steven Pearlstein
Washington Post
April 23, 2010

I know you'll all be comforted, as I was Wednesday, by the public vote of confidence from Steve Schwartzman, chief executive of private equity giant Blackstone Group, when he said that his firm would continue to do business with Goldman Sachs and that he's never had a shred of doubt about the investment bank's ethical character.

So let me get this straight. Goldman Sachs is now relying on the character reference of a Wall Street sharpie who notoriously snookered investors into buying non-controlling shares of a private equity firm at the very moment when a credit-induced takeover bubble was about to burst...



Obama to Wall Street: ‘Join Us, Instead of Fighting Us’
Ruth Fremson/The New York Times
By PETER BAKER
April 22, 2010

President Obama challenged some of the nation’s most influential bankers on Thursday to call off their “battalions of financial industry lobbyists” and embrace a new regulatory structure meant to avert another economic crisis.

Speaking in the bankers’ backyard, at the Cooper Union in Manhattan, Mr. Obama castigated a “failure of responsibility” by Wall Street for having led to the financial crisis of 2008, and he pressed his case for what he called “a common-sense, reasonable, non-ideological” system of tighter regulation to prevent any recurrence. He took issue with the claim that his proposal would institutionalize the idea of future bailouts of huge banks.

“That may make for a good sound bite, but it’s not factually accurate,” Mr. Obama said. “It is not true. In fact, the system as it stands is what led to a series of massive, costly taxpayer bailouts...

We need more regulation of financial industry: Lehman Examiner to Testify That S.E.C. Sat on Its Hands

Lehman Examiner to Testify That S.E.C. Sat on Its Hands
Stephen Crowley
The New York Times
By SEWELL CHAN
April 19, 2010

The court-appointed examiner who dissected the Lehman Brothers bankruptcy is expected to criticize the Securities and Exchange Commission on Tuesday for its decision to “stand by idly” as the investment bank veered toward collapse.

The S.E.C. knew that Lehman did not have adequate liquidity and had exceeded its own limits on risk-taking but in essence did nothing, the examiner, Anton R. Valukas, will say in testimony released in advance by the House Financial Services Committee.

One of the most damning findings in Mr. Valukas’s 2,209-page report last month — that Lehman used accounting gimmicks to hide the extent of its indebtedness — was not known to the S.E.C. He wrote: “I saw nothing in my investigation to suggest that the S.E.C. asked even the most fundamental questions that might have uncovered this practice early on, before Lehman escalated it to a $50 billion issue.” ...

Bankers Without a Clue

Paul Krugman

Bankers Without a Clue
By PAUL KRUGMAN
New York Times
January 14, 2010

The official Financial Crisis Inquiry Commission — the group that aims to hold a modern version of the Pecora hearings of the 1930s, whose investigations set the stage for New Deal bank regulation — began taking testimony on Wednesday. In its first panel, the commission grilled four major financial-industry honchos. What did we learn?

Well, if you were hoping for a Perry Mason moment — a scene in which the witness blurts out: “Yes! I admit it! I did it! And I’m glad!” — the hearing was disappointing. What you got, instead, was witnesses blurting out: “Yes! I admit it! I’m clueless!”

O.K., not in so many words. But the bankers’ testimony showed a stunning failure, even now, to grasp the nature and extent of the current crisis. And that’s important: It tells us that as Congress and the administration try to reform the financial system, they should ignore advice coming from the supposed wise men of Wall Street, who have no wisdom to offer.

Consider what has happened so far: The U.S. economy is still grappling with the consequences of the worst financial crisis since the Great Depression; trillions of dollars of potential income have been lost; the lives of millions have been damaged, in some cases irreparably, by mass unemployment; millions more have seen their savings wiped out; hundreds of thousands, perhaps millions, will lose essential health care because of the combination of job losses and draconian cutbacks by cash-strapped state governments.

And this disaster was entirely self-inflicted. This isn’t like the stagflation of the 1970s, which had a lot to do with soaring oil prices, which were, in turn, the result of political instability in the Middle East. This time we’re in trouble entirely thanks to the dysfunctional nature of our own financial system. Everyone understands this — everyone, it seems, except the financiers themselves.

There were two moments in Wednesday’s hearing that stood out. One was when Jamie Dimon of JPMorgan Chase declared that a financial crisis is something that “happens every five to seven years. We shouldn’t be surprised.” In short, stuff happens, and that’s just part of life.

But the truth is that the United States managed to avoid major financial crises for half a century after the Pecora hearings were held and Congress enacted major banking reforms. It was only after we forgot those lessons, and dismantled effective regulation, that our financial system went back to being dangerously unstable...

UCLA professor offers wild solution to bad bank behavior: long jail terms

UCLA professor offers wild solution to bad bank behavior: Scare them straight
Peter Cohan
Nov 16th 2009

A UCLA professor has come up with a wild idea to help prevent the next financial meltdown. He doesn't propose expensive regulations and mechanisms of enforcement on financial actors. Instead, he suggests that swift and decisive punishment of the biggest instigators of financial mayhem could scare the industry straight.

Before getting into the details of his proposal, let me introduce the man and his new book, from which this idea springs. Professor Mark A.R. Kleiman heads UCLA's Drug Policy Analysis Program. Years ago, we shared an apartment while I was working at a summer job in Cambridge, Mass., and he was teaching at Harvard's Kennedy School of Government. Kleiman also runs a great blog -- The Reality Based Community. I contacted Kleiman a few weeks ago after seeing his new book, When Brute Force Fails, from Princeton University Press, in the window of the Harvard Book Store...

Lori Richards, Director of SEC Inspections Office, Resigns after Failing to Uncover Madoff Fraud

Director of SEC Inspections Office Resigns
By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, July 9, 2009

A senior Securities and Exchange Commission official who oversaw an office that conducted key probes of Bernard L. Madoff's business is resigning, following a period when the agency reevaluated how it conducts oversight of brokers and investment advisers.

Lori A. Richards is stepping down after 14 years as director of the Office of Compliance Inspections and Examinations, which has come under scrutiny for its role in the SEC's monitoring of Madoff's business. Her office reviewed his firm at least three times, in 1999, 2004 and 2005, without finding the multibillion-dollar fraud he was conducting.

With Richards' departure, SEC Chairman Mary L. Schapiro will soon have installed her own people in nearly all the top positions at the embattled agency. Early in her tenure, she asked enforcement director Linda Thomsen to leave and hired Robert Khuzami, a former federal prosecutor focused on white-collar crimes in New York, as a replacement...

Judge finds "extraordinary evil" in Bernard Madoff for fraud against so many

Bernard Madoff

Can you physically harm someone just by cheating him or her out of money that is rightfully theirs?

Are economic crimes indirectly crimes of violence?

They are, and it's time that many people in positions of prestige and power were recognized for the harm they do. It isn't just money if it's someone's livelihood.


Madoff gets 150 years in prison
‘Extraordinary evil’ cited by judge
Bernard L. Madoff received the maximum penalty.
By Beth Healy and Casey Ross
Boston Globe Staff
June 30, 2009

Despite his claims of contrition, Bernard L. Madoff was sentenced yesterday to 150 years in prison for a crime a federal judge called an act of “extraordinary evil.’’

The lengthy sentence - ensuring Madoff will die behind bars - was the harshest possible punishment that US District Judge Denny Chin could impose.

In March, the former investment manager confessed to swindling some of the nation’s wealthiest families and prominent philanthropies out of their fortunes, along with cheating widows, retired teachers, tradesmen, and hundreds of other middle-class investors out of their life savings.

“The fraud here was staggering,’’ Chin said during the sentencing in a packed Manhattan courtroom. “This is not just a matter of money. The breach of trust was massive.’’

And yet investigators are still trying to determine its full scope.

Last night, a person familiar with the investigation said 10 more people are likely to face federal charges over the next few months, the Associated Press reported. The person, who spoke on condition of anonymity because the investigation is ongoing, would not say whether Madoff’s relatives or former employees are being targeted.

Boston was one of several focal points of Madoff’s two-decade fraud, and yesterday several victims from Massachusetts expressed satisfaction after the sentencing. But they said the prison term is not enough to undo the financial devastation he brought.

“I wish there was some way for him to feel the hurt and the damage he has created,’’ said David Ranzer, a retired broker from Williamstown who said he lost a nearly seven-figure sum to Madoff. “But I don’t think he’s capable of that, and the reason he is not capable of that is the very reason he allowed himself to do what he did.’’

Madoff drew many clients from the networks of Boston’s and New York’s wealthy Jewish communities, often socializing with them in the winter retreat of Palm Beach, Fla. Among them was the Shapiro family of Boston.

Last week, the Securities and Exchange Commission and the bankruptcy trustee overseeing the recovery of money for victims accused Robert Jaffe of Weston, the son-in-law of Carl and Ruth Shapiro, and the brokerage firm at which he worked of steering more than $1 billion in investors’ money to Madoff - when he should have known Madoff was running a fraud. Regulators said Jaffe earned at least $150 million from Madoff.

Jaffe, through his attorney, denied the charges.

Dozens of victims who submitted statements to the court detailed the extreme privation that Madoff’s theft had left them in. Some said they were reduced to living on Social Security, being forced to sell their homes, or returning to work years after having retired.

Madoff tried to address the anger and the emotions in a statement in court. Dressed in a dark suit and looking thinner than in March, when he pleaded guilty, Madoff spoke quietly, almost meekly - in marked contrast to the tearful, angst-ridden statements read by nine victims...





BERNARD MADOFF DIDN'T DO IT ALONE

Ten could eventually be charged in Madoff fraud
By Grant McCool
June 30, 2009
Reuters

U.S. investigators believe 10 or more people associated with imprisoned swindler Bernard Madoff could be criminally charged in the coming months or beyond, a law enforcement source said on Tuesday.

The source, who asked not be identified because of the ongoing investigation into the multibillion-dollar Madoff fraud, said the FBI was "closer to the beginning than the end" of the probe.

Disgraced financier Madoff, 71, was sentenced to 150 years imprisonment on Monday after he pleaded guilty in March to orchestrating a worldwide investment scheme of as much as $65 billion...

"There will probably be more people charged," the law enforcement source said. "It is likely to be 10 or more, but it is going to be a lengthy process that could take months or more."

A spokeswoman for the Office of the U.S. Attorney in Manhattan, which prosecuted Madoff and accountant David Friehling, declined to comment on the investigations.

Federal investigators have declined to identify who is the focus of their inquiries, but they are skeptical of the claims by some people who worked at the Madoff firm that they had no knowledge of the scheme.

Lawyers and white-collar crime experts have said all along that Madoff's decades-long scheme appeared to be too complex to have been the work of one person alone...

The trustee and regulators have sued several businessmen, who made billions in handling Madoff money through so-called feeder funds, charging that they knew or should have known the financier was running a fraud. (Reporting by Grant McCool, editing by Maureen Bavdek)

SIAtech gets charter schools association to say it's doing a good job

I wonder if the California Charter Schools Association operates like the Accrediting Commission for Community and Junior Colleges, demanding that trustees cover up financial abuses.

Charter school gets certified by trade group
San Diego Union Tribune
October 14, 2008

IMPERIAL BEACH: A charter school in Imperial Beach is one of the first in the county that has been certified by a trade association for its academics, finances and operations.

The local campus of the School for Integrated Academics and Technologies operates at the San Diego Job Corps Center. Like the other seven SIATech campuses in California, it typically serves dropouts from ages 16 to 24. The headquarters for the network of schools is in Vista.

Charter schools are publicly funded schools but are run by their own boards of directors and are free from many state regulations in exchange for delivering academic results promised in their founding document, or charter.

The California Charter Schools Association began certifying schools last year. It dispatches educators to review a charter school's academics and finances before granting certification.

SIATech is the ninth charter school in the county to receive certification.

San Diego County has about 70 charter schools. –C.M.
Chris Moran


VOICE OF SAN DIEGO REMINDS US THAT THIS SAME SCHOOL HAS STATE'S HIGHEST DROPOUT RATE

Vista Charter School Gets the Nod
October 7, 2008

Vista-based academy is the 9th charter school in San Diego County to be dubbed a Certified Charter School by the California Charter Schools Association, going through a wringer that includes an external review and reports, according to CCSA spokesman Gary Larson.

School of Integrated Academics and Technologies has multiple campuses across California and nationwide that use computerized learning to help youth who feel disconnected from school earn their degrees. It joins five other schools in North County and three in San Diego Unified that have earned the nod from the California Charter School Association, Larson said.

Getting the nod is especially sweet for SIATech, which got a lot of unwanted attention earlier this year for having the highest dropout rate in California, according to a study by the California Dropout Research Project. Spokeswoman Linda Leigh told me in February that the study failed to recognize that SIATech is a dropout recovery program:

"We're not an average high school," Leigh said. "We're a dropout recovery program. Traditional schools have failed the students who come to us. ... It's not a surprise that our dropout rate is higher than the traditional high school."

The report cited a 165.2 percent dropout rate for SIATech -- a figure that is possible because enrollment is only counted once, but dropouts are counted all year. Therefore, if students enroll midyear, then quit, they count as dropouts, but don't count towards enrollment...

-- EMILY ALPERT