This past year has proved to be just as scandalous as 2009 when it comes to Wall Street greed. Of course, everybody is innocent until proven guilty, but our list of Wall Street scandals involving the SEC could make for a great made-for-TV movie. (Take a look at last year's big scandals in 2009's Biggest Financial Scandals.)

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Green Mountain Coffee
Let's start with an SEC inquiry into an accounting irregularity that's as common on Wall Street as bulls, banker's collars and analysts who can't seem to get anything right.

Green Mountain Coffee has made investors a lot of money in 2010 and was up more than 13% from January to September of this year. In November, GMCR announced that it would restate its financial statements for fiscal years 2007-2009 and the first three quarters of 2010 as a result of an accounting error, according to a report released by Reuters on November 19.

The company had been under investigation by the SEC since September for its accounting practices. Although the mistakes have not been attributed to misconduct by the company or its employees, the investigation continues. In its December 9 Q4 conference call, the company stated that it was hoping for a quick resolution, but in its 2010 10-K report, it said that additional restatements of prior financial statements are still possible.

Trading Against Your Clients?
Another case of Wall Street antics surfaced when Goldman Sachs, one of the nation's largest investment banks, was accused of being on both sides of an investment product. Picture it. You go to your broker and they tell you about this great new product that allows you to invest in the housing market that has a good probability of rising in value over the next few years. Sounds like a good deal but there is something that your broker didn't tell you: this is a product they created with input from a hedge fund that planned on selling it short. In other words, they believed that the product will lose value.

Sound fishy? This basically what Goldman Sachs, along with several other major Wall Street banks, did with collateralized-debt obligations (CDOs). The SEC didn't like it either. After a very public investigation, Goldman Sachs agreed to pay $550 million to the SEC to settle civil charges that it had misled its investors, although the bank did not admit wrongdoing. (Learn more about CDOs in Collateralized Debt Obligations: From Boon To Burden.)

Hollywood Ponzi
This may just be the decade of the Ponzi scheme; if that's the case, this year's winner has to be former Manhattan money manager Kenneth Starr. According to the New York Times, Starr partied with celebrities and counted many of them – such as Al Pacino, Martin Scorsese and Ron Howard – as clients.

Unfortunately, the good times came to an end when Starr was arrested on May 27 on charges of defrauding several high-profile clients in a multi-million dollar Ponzi scheme. He did it the same way the infamous Bernie Madoff did: wine and dine his clients until they let their guard down enough to fork over huge sums. In fact, he was reportedly so charming that some of his investors had a hard time believing he had committed the crime, the New York Times said. (For more information on Bernie Madoff, see Madoff No "Mystery Man" To The SEC.)

In September of 2010, Kenneth Starr pleaded guilty to a $50 million fraud and the SEC gladly proclaimed to the world that they brought down yet another Ponzi scheme.

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Mark Cuban Gets Impatient
Dallas Mavericks owner and billionaire entrepreneur Mark Cuban is known for being two things: loud and impatient. This year he made an offer that may truly be a once-in-a-lifetime occurrence. The SEC began investigating Cuban in 2008 for an alleged insider trading violation dating back to 2004, but the charges were thrown out.

The case was revived on appeal in September, but the SEC revealed that the amount of material to review is so vast that they don't expect to take any more official action on this case until all documents are reviewed, which may take more than a year. Cuban, not happy about having to wait until 2012, offered to pay to hire lawyers and freelance staff to speed up the review of these documents in order to quickly resolve the case.

The SEC told Cuban to keep his money. But who ever heard of financing the prosecution anyway?

A Pornographic Scandal
You can't have a scandal article without some sex and here it is. This year, the SEC's inspector general revealed that from 2005-2009, senior level SEC employees used government computers to download and view internet pornography.

According to the Washington Post, one female staffer tried to access 1,800 porn sites in a two-week period and had 600 pictures saved on her laptop. Another admitted to sometimes spending eight hours a day viewing porn at the office and, if that isn't enough, one SEC attorney ran out of space on its office computer so he saved the images on DVDs and kept them in his office.

While illegal pornography access by federal workers is nothing new, one can't help but wonder whether it's really the volume of paperwork that holds up cases like Mark Cuban's.

The Bottom Line
While we are making light of some of the more outlandish cases involving the SEC, statistics show that 694 cases were settled in 2010, with the largest payout coming from Goldman Sachs at $550 million. But if 2010 has revealed anything about financial wrongdoing, it's that it is hardly scarce. For every high-profile case the SEC pursues, there are probably many smaller ones flying under the radar.

Find out what happened in financial news this week. Read Water Cooler Finance: Barack Obama Vs. The World.

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