Why I (Belatedly) Blew the Whistle on the SEC’s Failure to Properly Investigate Goldman Sachs

By James A. Kidney The New Yorker and Pro Publica websites today posted an article by Pro Publica’s Jesse Eisinger about the de minimis investigation by the Securities and Exchange Commission into the conduct of Goldman Sachs in the sale of derivatives based on mortgage-backed securities during the run-up to the Great Recession of 2008.  The details of the SEC’s failure to aggressively pursue Goldman in the particular investigation, Abacus, and its refusal to investigate fully misconduct by Goldman and other “Too Big to Fail” banks, stands not only as a historic misstep by the SEC and its Division of Enforcement, but undermines the claim that the Obama Administration has been “tough on Wall Street.”  The Pro Publica version contains links to a few of the documents I provided. No one in authority who was involved in the Goldman investigation ever gave me an explanation for why the effort was so slight. … Read more of this post . . .

Oh, The Secrets We Keep!

government-cloak-of-secrecy-open-governmentBy James A. Kidney

              While media focus was on Donald Trump and terrorism, there was little notice of a new report by the Department of Agriculture, citing new studies from the Center for Disease Control and the National Institutes of Health, affirming that there is no scientific evidence to support claims that genetically modified produce and meats cause any harm.  To the contrary, the report said, genetic modification will produce great benefits to health and increase substantially the food supply, leading to lower prices.  “A real win-win,” the report concluded.

The reaction from organizations and members of Congress opposing genetically modified organisms (“GMOs”) was immediate.  The Institute for Responsible Technology stated that the research “had to have been bought and paid for by Big Agra.”  The Non-GMO Project demanded an inquiry into the Agriculture report and the sources it relied upon.  Four liberal Democratic senators demanded that the Senate Agriculture Committee issue subpoenas for all information related to the reports and studies.  “We want to see everything,” said Debbie Stabenow, D-Mich., ranking member of the Committee.

OOOPS.  Fooled ya.

There is no such report from the Department of Agriculture.  But is there any doubt that had one been issued, the reaction from those opposed to GMOs would be as described above?  Instead, we have a leading troglodyte of the Republican Party seeking evidence to contest a study issued by the National Oceanic and Atmospheric Administration (NOAA) disputing claims published elsewhere that the rate of global warning has slowed in the last few years. Rep. Lamar Smith, a Texas Republican who is chairman of the House Committee on Science, Space and Technology and a climate science denier, launched the investigation and issued a subpoena for basically “everything” related to the NOAA study.

NOAA, every science organization you can name and the editorial page of The New York Times lambasted Smith for seeking emails and other records of scientists and bureaucrats paid by the taxpayer to ascertain whether the NOAA report was biased in favor of climate change advocacy.

Read more of this post . . .Oh, The Secrets We Keep!

A Necessary Corrective for the SEC?

By James A. Kidney

(This article originally was posted by Wall Street on Parade in December 2015)

          Most of the highlights of my 25-year career as a trial attorney at the Securities and Exchange Commission involve the half dozen or more insider trading cases I tried before juries. I was lead counsel in the very first jury trial the SEC ever brought – an insider trading case in Seattle in 1989. I prevailed on behalf of the SEC in every one of my insider trading trials.

I wish I could say these victories achieved something important for securities enforcement. I doubt that they did. Those cases tried against other than true corporate insiders were largely a waste of government (and my) time. As were the far more numerous such cases which settled without trial, sometimes for substantial sums by any standard, and sometimes by such small sums they were substantial only to the middle class sap who acted on a stock tip and had the misfortune to be persecuted by the SEC.

Read more of this post . . .A Necessary Corrective for the SEC?

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