Former SEC chief Harvey Pitt has piece up on The Daily Beast arguing that with its fraud charges against Goldman Sachs (GS), the SEC is seriously gambling with its credibility.
That Pitt would take this view isn’t too shocking, given the way this debate seems to have broken down over partisan lines, and Pitt, though not typically seen as political, was a Bush guy.
But even so, his argument is doubly defensible in light of new revelations that the agency may have withheld some strongly exculpatory evidence in the case — namely that Paolo Pellegrini specifically told the SEC that ACA was informed of Paulson’s intentions to go short.
What will kill the SEC is not just bringing a bad case to try to make itself look tough. What will kill the SEC is if it comes out that a case was brought because the SEC’s leaders were hellbent on making a charge for political reasons.
That is what Darrell Issa is concerned about, and if those fears are realised we may end up with a financial regulator that’s even weaker than it was before.
Don’t miss: the complete Goldman Sachs winners and losers >
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