A retired trial attorney from the US Securities and Exchange Commission has some criticism for his former employer. James Kidney, who joined the regulator in 1986 and retired this month, voiced out his critique about the SEC during a goodbye party speech. According to Bloomberg, Kidney's comment had struck home to what many of his colleagues and alumni as it was not common knowledge that he had internally campaigned for SEC to file charges against more executives in the agency's case against Goldman Sachs Group Inc in 2010.
Bloomberg said that the lawsuit against Goldman Sachs was one of the highest-profile ations brought by the SEC from the 2008 credit crisis. The Wall Street bank had paid a little over half a billion dollars to settle claims that it misled investors on a subprime mortgages-backed complex security. The agency also sued Fabrice Tourre, the vice president of a team responsible for putting the complex deal together known as Abacus 2007-AC1.
Citing a copy of his remarks obtained by the news agency, Kidney has been quoted as saying, "(The SEC has become) an agency that polices the broken windows on the street level and rarely goes to the penthouse floors. On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening."
Also in his speech, Kidney stated that his superiors were careful with bringing cases against private companies like Goldman as they were more focused on getting high-salaried jobs after their stints in public service.
when he was interviewed following a rousing March 27 remarks, Kidney claimed that he did not receive any blowback from officials of the SEC. SEC spokesman John Nester also declined to comment about Kidney's remarks.
The 66 year-old has won half a dozen insider trading cases for the SEC, Bloomberg said. Kidney told Bloomberg that his remarks does not mean that he is against SEC, but rather wanted to provide a constructive criticism about the mentality of SEC in bringing cases against the powerful and influential Wall Street.
