I was on vacation last week and apparently missed lots of big news. A volcano kept me from going to Europe, but nothing stopped the SEC from bringing a case against Goldman Sachs. Here are some recent compliance related stories that I found interesting.
We were dismayed at the leaks that revealed confidential discussions taking place at a closed Commission meeting about the Goldman case. We are equally dismayed at the recent announcement by the SEC’s Inspector General that he intends to look into allegations that the Goldman case was deliberately timed to coincide with financial reform efforts.
Sometimes the SEC is an aggressive market regulator and at other times it appears to be the gang that can not shoot straight. In filing the Goldman case, discussed here, it not only brought the most significant enforcement action in years, but also responded to critics who claim the agency can not take on the Wall Street giants, but only the little guys.
It is going to be hard for the SEC to establish that GS defrauded investors by its failure to disclose Paulson’s role and intentions in ABACUS. Why? Paulson wanted to make a bet. A bet is not a sure thing. If Paulson or GS could affect the outcome of the bet then that is another matter.
In related news, the NYPD determined that the possibility that a pipe bomb could be placed in a bicycle gave rise to the theft of hundreds along Houston Street in Manhattan, in anticipation of President Obama’s trip to Cooper Union last week in honor of Earth Day.
The hedge fund industry is a top programmatic priority of the U.S. Securities and Exchange Commission (SEC) Division of Enforcement. The Division is currently allocating unprecedented resources to hedge fund issues and investigations. This focus will intensify if hedge fund legislation is passed.
An FCPA trial like Bourke’s is rare. An FCPA appeal is even more rare. An FCPA appeal to the influential Second Circuit is even more rare. …This post summarizes the FCPA related issues in Bourke’s brief.
On today’s All Things Considered: A Glossary of Financial Terms, Adam Davidson explains the difference between a mortgage-backed security, a CDO, and a synthetic CDO. Also, why shorts aren’t bad, and what a tranche is.