Watchdog: SEC wasted $1 million on data storage technology dealings with Apple

“The U.S. Securities and Exchange Commission wasted $1 million on virtual data storage it bought in 2008, the agency’s internal watchdog said, part of a series of investigations into the agency’s procurement practices,” Sarah N. Lynch reports for Reuters.

“The findings could provide ammunition to Republican lawmakers seeking to deny extra money for the SEC, concerned by the U.S. budget deficit but also looking to starve regulators of funding to implement the Dodd-Frank financial overhaul law,” Lynch reports. “In the December report, Kotz investigated the SEC’s acquisition of data storage technology, which included items from Apple Inc. and virtual storage provided by a firm called Cloverleaf Communications, later acquired in 2010 by Dot Hill Systems. The report, dated December 14, 2010, was obtained by Reuters through a Freedom of Information Act request.”

“According to the investigation, an Apple salesman convinced the agency that Cloverleaf could provide a cheaper solution to the agency’s data storage and backup woes,” Lynch reports. “Although there were other companies that offered similar products, Kotz said the SEC violated federal contracting procedures by securing a no-bid contract with Cloverleaf, a company with which the SEC had no experience. Kotz said the contract actually proved ‘to be more expensive than other, better-known and less risky alternatives.'”

Lynch reports, “He also found the SEC improperly shared budget information with Apple and went ahead with purchases before getting proper approval and before performing reviews. Representatives of Dot Hill, Apple and the SEC did not immediately respond to requests for comment.”

Read more in the full article here.

MacDailyNews Take: Ooh, one miilllliion dollars! We blame Dr. Evil.

We’re not excusing or condoning any waste, but please: $1 million dollars out of the total money wasted annually by the U.S. government is akin not to a drop of water in a bucket, but to one molecule of H2O in the Pacific Ocean. We wouldn’t be the least bit surprised if the government’s “series of investigations” into the matter cost more than the amount that was “wasted.”

This seems more like an attempt to smear Apple than anything else.


  1. How much MORE money will they waste investigating this problem. How about we investigate the BILLIONS of dollars wasted by contractors in Iraq on half built and poorly built infrastructure.

    Ad for the financial overhaul, it doesnt go far enough yet they are doing everything they can to wriggle out of it. They showed they couldnt monitor themselves, they deserve all the regulation that can be thrown at them.

  2. That Apple is involved is coincidental and maybe will be used by the Microsoft camp, But there’s no Apple technology involved, so I don’t see how it reflects badly on Apple directly.

    This story is just about politicians justifying their existence in advance of the upcoming 2012 elections.

  3. Did you notice that they didn’t say that the solution did not meet their needs, nor did they say it was “risky”, they said there were “less risky” alternatives. Seems like all smoke blown by folks that did not get the contract.

  4. A guy in the SEC, calls his sales buddy over at Apple and tries to work a deal.

    There wasn’t enough money in the SECs budget to get all the hardware they needed so the sales guy said, call my buddy over at Cloverleaf, who can make you a good deal on fake, er., virtual computers.

    What they didn’t know was, once you turn off the power all the virtual computers disappear!

  5. This shouldn’t be a bad reflection on Apple or Cloverleaf. The people at the SEC didn’t follow proper procedures in getting bids from other companies and doing research.

    Its like when we buy extra RAM or hard drives for our computers; do you shop around to find the best price/quality or just buy from Walmart or your local store.

    And did the SEC get this ‘recommendation’ from Apple Corporate, or did these guys just walk into their local Apple Store and ask a Mac Specialist/Genius? Sounds like SEC didn’t do enough research before spending their money. Lesson learned, next time do some research like most of us here on this board do.

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