S.E.C. Puts Wall St. on Notice
Excerpts from: The New York Times
WASHINGTON — In the last few years, the Securities and Exchange Commission seemed like the cop in the doughnut shop, sitting idly by while the likes of Lehman Brothers and Bernard L. Madoff ran amok.
But with its latest lawsuit against Goldman Sachs, the most powerful, most feared and most envied firm on Wall Street, the S.E.C. is sending a signal that it is back on the beat and that it is going after very big targets.
In interviews this weekend, Mary L. Schapiro, the commission’s chairwoman, and Robert Khuzami, its new director of enforcement, said the agency was stepping up both its rule-making and its investigations in the wake of the financial crisis.
Neither would elaborate on the case being pursued against Goldman, but Ms. Schapiro said the commission had recently proposed new rules for credit rating agencies and for the reporting of the specific investments behind asset-backed securities, two issues that were integral to the recent financial crisis.
The Goldman case is not the only example of the agency raising its sights. Last week, General Electric said the S.E.C. had asked for information about reassurances that its chief executive, Jeffrey R. Immelt, made in 2008 about the company’s ability to refinance its debt.
In his recent memoir, Henry M. Paulson Jr., the former Treasury secretary, said Mr. Immelt told him at the time that G.E. was having problems selling short-term debt. G.E. said on Friday that it was cooperating with the agency and that its disclosures were accurate.
The S.E.C. also has joined an international investigation into whether Hewlett-Packard paid bribes to win business in Russia. The company said it was cooperating with investigators while conducting its own inquiry.
“We’re seeing a resolve in the enforcement division that was lacking a year and a half or two years ago, and even 10 years ago,” said James D. Cox, a Duke University law professor. “Americans should take heart” in the Goldman case, he said.
Comments:
Has the SEC awaken from its slumber?
Are the evil doers being brought to justice?
Perhaps I have become somewhat cynical over the past 2 years of the crisis, seeing massive government intervention in markets with tax dollars to "save us". It seems to me that Nero was fiddling while Rome burned. What about the creation of Fannie & Freddie that led to the largest real estate bubble in American history. Or for that matter, the creation of the Fed itself?
In my view, this is simply bread and circuses for the masses.
The SEC pretends to be tough.
Goldman pretends that it hurts.
Corporate culture and corporatism remain unchanged.
Excerpts from: The New York Times
WASHINGTON — In the last few years, the Securities and Exchange Commission seemed like the cop in the doughnut shop, sitting idly by while the likes of Lehman Brothers and Bernard L. Madoff ran amok.
But with its latest lawsuit against Goldman Sachs, the most powerful, most feared and most envied firm on Wall Street, the S.E.C. is sending a signal that it is back on the beat and that it is going after very big targets.
In interviews this weekend, Mary L. Schapiro, the commission’s chairwoman, and Robert Khuzami, its new director of enforcement, said the agency was stepping up both its rule-making and its investigations in the wake of the financial crisis.
Neither would elaborate on the case being pursued against Goldman, but Ms. Schapiro said the commission had recently proposed new rules for credit rating agencies and for the reporting of the specific investments behind asset-backed securities, two issues that were integral to the recent financial crisis.
The Goldman case is not the only example of the agency raising its sights. Last week, General Electric said the S.E.C. had asked for information about reassurances that its chief executive, Jeffrey R. Immelt, made in 2008 about the company’s ability to refinance its debt.
In his recent memoir, Henry M. Paulson Jr., the former Treasury secretary, said Mr. Immelt told him at the time that G.E. was having problems selling short-term debt. G.E. said on Friday that it was cooperating with the agency and that its disclosures were accurate.
The S.E.C. also has joined an international investigation into whether Hewlett-Packard paid bribes to win business in Russia. The company said it was cooperating with investigators while conducting its own inquiry.
“We’re seeing a resolve in the enforcement division that was lacking a year and a half or two years ago, and even 10 years ago,” said James D. Cox, a Duke University law professor. “Americans should take heart” in the Goldman case, he said.
Comments:
Has the SEC awaken from its slumber?
Are the evil doers being brought to justice?
Perhaps I have become somewhat cynical over the past 2 years of the crisis, seeing massive government intervention in markets with tax dollars to "save us". It seems to me that Nero was fiddling while Rome burned. What about the creation of Fannie & Freddie that led to the largest real estate bubble in American history. Or for that matter, the creation of the Fed itself?
In my view, this is simply bread and circuses for the masses.
The SEC pretends to be tough.
Goldman pretends that it hurts.
Corporate culture and corporatism remain unchanged.
PW, I agree that this is nothing but a show since November elections are coming up and both parties need an edge.
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