Capital Markets

Issa Questions SEC's Market Timing

|

Securities and Exchange Commission's inspector general David Kotz will wind down from revealing government employee porn preferences with an investigation of whether the financial watchdog timed its fraud suit against Goldman Sachs to help the proposed overhaul of financial regulation.

Darrell Issa is not afraid to show his emotions.

The investigation comes in response to a request from Rep. Darrell Issa (R-California), the man who would be governor of the golden state if not for this country's blatant anti-Lebanese bias.

From Issa's letter [pdf] to Kotz:

The circumstances of the filing and subsequent events fueled suspicion that the Commission, or one or more of its officials or employees, may have engaged in unauthorized disclosure or discussion of Commission proceedings in order to affect the debate over financial regulatory legislation currently pending before the United States Senate.

Issa, lachrymose ranking member of the House Oversight Committee, and seven other Republicans want to know whether the SEC leaked news of the suit to The New York Times, whether it coordinated with President Obama's Organizing for America group and/or the Democratic National Committee, and why the SEC's vote to proceed with the suit split along party lines. If the SEC was looking to time its investigation according to the legislative schedule, that would help explain why it went forward with what looks like a weaker case than the circumstances warrant.

For lefties not versed in the ways of the world, Republicans are standing up for Goldman because they support laissez faire capitalism and unfettered free markets. Inconveniently for that thesis, Goldman has given more than twice as much money to Democrats as to Republicans in this election cycle.

Issa's accusations, which turn on such feeble evidence as a DNC Google ad buy "within hours" of the SEC's announcement, don't look terribly strong. More to the point, this kind of corrupt use of the SEC could just be an example of things working the way they're designed to work. While political timing would go against the "spirit of independence" guidelines in the Code of Federal Regulations, the SEC belongs to the executive branch, and the president's cronies have broad discretion to deploy it as they see fit. If you want to change that, change the structure of financial regulation. Or better yet, get rid of the SEC, a New Deal creation that is as useless in dealing with the financial markets of the 21st century as it was in dealing with the financial markets of the New Deal era.

NEXT: Jack Chick Slash Fic

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. If you want to change that, change the structure of financial regulation. Or better yet, get rid of the SEC, a New Deal creation that is as useless in dealing with the financial markets of the 21st century as it was in dealing with the financial markets of the New Deal era.

    Perfect vs. Good — tonight on Reason pay-per-view!

    1. Tulpa vs. Sopping Vagina tonight on Douche TV.

      My money’s on the vagina.

      1. Mine too.

        1. You got that right.

    2. I dont see the perfect option in there at all.

      1. “change the structure of financial regulation” — this could be either good or bad, depending on the changes.

      2. “get rid of the SEC” — this would be a good, although not a perfect, unless the regulations went away too, and the government-business partnerships/lobbying went away also.

      1. Fine, better vs. good then. The author opines that it’s not a big deal if the administration is manipulating SEC enforcement for political reasons, because we just need to get rid of the SEC anyway.

        1. Looks like better vs good/bad.

          I will take better vs a coin flip.

  2. Lebanese people are best used to cook delicious things. Quick, what’s more delicious: kefteh or kibbeh?

    1. keftah, fool

    2. Yeah kefteh, definitely. Kibbeh is very dry.

      1. Ha.

        Lebanese Kibbeh is dry. But Morocco’s kibbe is cooked in a delicious sauce.

        You people need to broaden your horizons.

  3. For lefties not versed in the ways of the world, Republicans are standing up for Goldman because they support laissez faire capitalism and unfettered free markets. Inconveniently for that thesis, Goldman has given more than twice as much money to Democrats as to Republicans in this election cycle.

    Wait, I think you tried some kind of double-snark Suck maneuver but missed, Tim. At least I’m having trouble parsing it.

    Oh, wait, “they” in the first sentence has Goldman as the antecedent, not Republicans?

  4. LOL, the SEC is a JOKE. About as useless as the TSA.

    Lou
    http://www.online-anonymity.tk

    1. My God! A somewhat relavant comment from the spambot! We have to recalibrate the phasers!

  5. …Republicans are standing up for Goldman because they support laissez faire capitalism and unfettered free markets.

    That’s a joke, right? I’m still hungover from last night. My sarcasm detector is on the fritz.

    1. Tim Cavanaugh prefaced that with “For lefties not versed in the ways of the world,” But, if it were on its own it would have to be a joke, yes. Most Republicans have not stood up for free market economics in quite some time. Ron Paul and Jeff Flake are the only two I know on the national level willing to give more than mere lipservice to free market economics.

      1. PIRS has it right. Was imputing the belief to lefties, not stating it myself. Although as Thacker notes above, I may have gone a dipsydoodle too far in this case.

        1. Cavanaugh, reliably promiscuous with the dipsydoodles. D’oh!

      2. I’m not sure standing up for a company the appears to be guilty of actual fraud counts as “standing up for free market economics”, even if the administration is using the prosecution of that fraud to it’s advantage.

  6. “Issa’s accusations, which turn on such feeble evidence as a DNC Google ad buy “within hours” of the SEC’s announcement, don’t look terribly strong.”

    Keep in mind the old axiom that there is no such thing as a coincidence where high stake politics are involved.

    1. Well it doesn’t really look like coincidence. Political hacks are busy bees, always bragging about how they can turn on a dime, react in two seconds, are on 24 hours a day, etc. It’s not hard to believe they could have had ads up in a few hours to capitalize on this news. (Unless buying AdWords is a long process with a lot of lead time, but I’ve never heard of Google being slow either.)

      1. And the New York Times?

        How did they get wind of the story before Goldman Sachs?

        1. They didn’t: The SEC told Goldman months ago that a suit was in the works. And in fairness to the NYT, they do pay a lot of money for aggressive reporters who can break stories. My experience as both a hack and a flack is that sources strike exclusivity/cooperation agreements all the time with MSM reporters that depend on “embargos” until a particular date. It could just be thatThe New York Times pre-empted the embargo by an hour.

          But lucky for us, we can find all this out when the IG puts out his report.

          1. Doesn’t the thought of “news embargos” send warm, fuzzy feelings fleeing through your stomach?

            Thanks for the info!

          2. But lucky for us, we can find all this out when the IG puts out his report.

            How many times did you pause to laugh while typing that sentence?

  7. Looks like Issa has got some cocaine still stuck in his nose. About as feeble of a comment as this post. To the powder room, I hope the quality improves when i get back.

  8. I’m thinking a “pop-quiz”-like scheme might help the SEC (indeed, any gov’t agency) with transparency and self-policing. Every day a *random* employee would be required to post on YouTube a 5-minute off-the-cuff explanation of what (s)he does as a servant of The American People?, who would then have a week to vote him/her off the island. Of course, this would not apply to union workers.

  9. Is this the same Issa whose 49th Congressional District is in such dire economic conditions? One would think he (Issa) figured out it was Wall Street which created most of those problems his hapless constiuents must deal with now.

    This registered (for 30 years) Republican believes it is Issa’s timing which is “suspect,” not the SEC’s. The IG (Kotz) was hired by Christopher Cox, Wall Street’s very accomodating former SEC Chairman. Looks like Issa still gets his marching orders from Cox which is too bad.

    1. This registered (for 30 years) Republican

      This sort of phrase isn’t convincing in letters-to-the-editor, and it’s isn’t in blog comments either. You might as well have a blink tag announcing “TROLL.”

      I mean, maybe you’re not, but your argument should stand on its own or not. Appeal to authority and one’s own impartiality is pretty ridiculous in the first place, but it’s especially ridiculous when some random person I’ve never heard of or met is trying to assure me that he’s unbiased. As if he’s going to be able to prove that.

  10. “…an investigation of whether the financial watchdog timed its fraud suit against Goldman Sachs to help the proposed overhaul of financial regulation.”

    Are people seriously questioning the timing? How could it not be related?

    You gotta be blind not to think…

    We all fill in the blanks with our own biases, but thinking that Presidents don’t time stuff like this… Aren’t there like whole staff positions in the White House devoted to getting things synced up like this?

    If the White House doesn’t have somebody on staff whose job it is to synch up stuff like this, then they need to hire somebody to do that…quick.

    That’s gotta be the first day of Being President 101. Have any of these people ever run anything? Do you have any idea how hard it is to get stuff done?

    What do you think the President does? Wake up in the morning, have some coffee, go into the office and say, “So, what do you guys wanna do today?”

  11. Boy, I hope Goldman Sachs gets fined billions of dollars….. which would still not do any thing to them after all the bailout gold that they received..

    How lame is Obama to put up the GS as a pinyata here.?

    Republicans HAVE ZERO CREDIBILITY to protest against what the SEC is doing even if the protests by themselves are valid.

    I am not shedding any tears foe these GS bastards and hope some of them go straight to jail, where they share a cell with Barney Frank ( who is going to send him to jail for his criminal defense of FannieMae?)

    1. Well, it was also exquisitely timed to bury the SEC IG’s report on how they dropped the ball or worse WRT Stanford/Sanford/whatever that scammer is named. Arguely it looks worse for the SEC than Madoff.

  12. I’m Republican and the financial bailout violated all the principles of free markets and laissez faire.

    The Republicans that supported this are lefties.

  13. What I see is a feeble SEC action that is a good front for the Dems to use as a cudgel in the “we want financial reform” info battle. I want to see criminal indictments before I believe anything the Dems “do to” their massive Wall Street donor pals.
    And the SEC needs a real good enema. Put Karl Denninger in charge of it and we’ll some real action.

    1. Yes. Where are the handcuffs?

  14. WTF does Goldman have to do with laissez faire capitalism and unfettered free markets?

    1. Tim you didn’t answer my question. Here’s another. How does Rep. Darrell Issa’s association with terrorist states and organizations show anti-Lebanese bias on the part of “the country”. Maybe the fact he holds office at all shows that there isn’t this invented bias. Considering his associations I’d say the fact he still holds office is only evidence of anti-Semitic bias on the part of his constituents. At least using the evidence provided by the link you provided.

  15. Republicans are standing up for Goldman because they support laissez faire capitalism and unfettered free markets. Inconveniently for that thesis, Goldman has given more than twice as much money to Democrats as to Republicans in this election cycle.

    You know, it isn’t often you find such a blatant non sequitur in the wild like this.

  16. Meanwhile, a great many of us have dressed up like red indians to re-enact the making of tea in the brine of Boston Harbor.
    Goldman Sachs is, to my mind, just another player in the crony capatalist game so well pioneered by such predecessors as Krupp, I.G Farben and others in Germany. Ironic as that may sound, Goldman Sachs is as comlicit in this deal with American liberal fascism as any of the firms that made the deal with the devil (Hitler’s regime) in pre-war Germany.
    Betrayal of the principles and institutions that made them possible should be fatal to Goldman. Obama’s latest “pinata” (thank you whoever phrased that above) is intented to get all the others in line to be properly extorted. I guess there really is no honor among thieves.
    PS: GS, we want our money back.

  17. Tim,
    I thought this would have been fixed by now. The links for “weaker case” and “lefties not versed in the way of the world” have been transposed. This is not a hypersubtle snark. Under “weaker case” you have Crooks & Liars lambasting Republican SECers for voting against what they regard as a strong case, while under “lefties not versed” you have your own explanation of why it’s a weaker case. These swapped links undercut a good article — I’m amazed no one has pointed it out before.

  18. Okay, I just said “good article” for the good points made, but I should add that I think you’ve missed some of Issa’s implication, which may be correct. It isn’t just that the case was rushed out to make the administration look tough on Goldman while the regulation bill was being considered; it is a case that will fail in court sometime _after_ the bill has been passed and not actually hurt the big donators at Goldman much.

  19. For lefties not versed in the ways of the world, Republicans are standing up for Goldman because they support laissez faire capitalism and unfettered free markets.

    As you suggest, that’s a bit like standing up for the Politburo because you support free market capitalism.

  20. There are two separate question here. Is GS a fine example of anti-capitalism and undeserving of support from Republicans or anyone else?

    Yes.

    Is the Democrats feigned “attack” on GS a smokescreen through which the Dems hope to funnel lots of taxpayer moolah to their friends at GS?

    Yes.

Please to post comments

Comments are closed.