REGULATORS

SEC's Schapiro rejects claims that Democrats' agenda spurred Goldman case

By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, April 22, 2010

Saying she was "disappointed by the rhetoric," the chairman of the Securities and Exchange Commission on Wednesday forcefully rejected Republican lawmakers' claims that the agency filed its fraud suit against Goldman Sachs in an effort to support the work of the White House and congressional Democrats seeking to pass an overhaul of financial regulation.

"The SEC is an independent law enforcement agency," Chairman Mary Schapiro said in a statement. "We do not coordinate our enforcement actions with the White House, Congress or political committees. We do not time our cases around political events or the legislative calendar."

President Obama seconded that view, telling CNBC that the SEC "never discussed with us anything with respect to the charge that will be brought. So this notion that somehow there would be any attempt to interfere in an independent agency is completely false."

The strongly worded statements from both Schapiro and Obama came after Rep. Darrell Issa (R-Calif.), the ranking Republican on the House Oversight and Government Reform Committee, sent Schapiro a letter earlier this week asking that the SEC provide his panel with any information regarding communication or coordination on the Goldman suit with congressional Democrats or the Obama administration.

Schapiro said the commission has brought forward many cases related to the financial crisis and said she was disappointed "on a personal level." "I cannot think of any instance where politics was a consideration in bringing an enforcement action," she said. "Nor should it ever be."

There is no evidence that the SEC timed its case based on political concerns, but the agency has been susceptible to political pressure in the past. Former SEC chairman Christopher Cox has said he pushed an ill-fated ban on short sales through the commission in the fall of 2008 because of pressure from then-Treasury Secretary Henry M. Paulson.

-- Zachary A. Goldfarb


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