If you want to believe that the demise of Metropolitan Mortage & Securities was the sad consequence of well-meaning people making honest mistakes, don’t read the special examiner’s report. If you want to believe that accounting firms provide all the checks and balances needed, don’t read the special examiner’s report. And if you want to believe there’s a sufficient amount of government regulation for the securities industry, you might want to skip the entire Metropolitan Mortgage story.

The special examiner’s report is a devastating indictment of the leadership of an Inland Northwest institution. Read it if you want to understand why the 36,000 investors who have lost some or all of their life savings are out for blood.

Yes, Metropolitan Mortgage was a community asset for more than 50 years. But there’s just no avoiding the fact that the money it spread around in recent years was the product of unethical and, quite possibly, illegal transactions.

Law enforcement officials will have to decide whether anyone will go to jail, but where were the cops who are supposed to protect and serve investors?

The special examiner, Samuel Maizel, traced the downfall of Metropolitan to the 1990s, when the family-owned company branched out to commercial lending. When that began to fail, Maizel said the company’s chief executive, Paul Sandifur Jr., turned to questionable methods to mask the struggles. One of the strategies was to set up offshore investment deals that merely shuffled paper around to elude the Internal Revenue Service and allow the company to post profits during an otherwise bad year.

And where did Metropolitan get such an idea? From its accounting firm at the time, PriceWaterhouseCoopers, which, along with other accounting firms, marketed a wide variety of such tax shelters during the boom times of the 1990s. PWC also conducted audits of Metropolitan.

So, who was looking out for the investors? Other than a state regulator named Deborah Bortner, nobody. For years, Bortner engaged in a running battle with Metropolitan over its business practices. It was her letter to the Securities and Exchange Commission about 20 months ago that might have been the catalyst for a long-overdue crack-down. But even she admits she should’ve blown the whistle sooner.

Our capitalistic society hesitates to put reins on financial transactions, and too much regulation can impede the economy. But when lawmakers pass sensible laws that establish rules and protect investors, they need to fully fund the agencies charged with enforcement. The 2002 law that came in the wake of the corporate scandals at Enron, WorldCom, Tyco, etc., was passed with much fanfare. But to this day, the regulatory elements are still not fully funded.

If you want to understand why that’s important, just ask a Metropolitan investor. In the meantime, it’s buyer beware.