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April 9, 2014

SEC Insider Indicts Agency as Soft on Wall Street: Four Blunt Points

“Here’s the best story you’ll read today out of Wall Street or Washington: Robert Schmidt’s Bloomberg News scoop on a retiring Securities and Exchange Commission trial attorney who used his farewell speech to scold his former bosses for being “tentative and fearful” when it came to going after top executives in the wake of the 2008 financial crisis. Let’s break it down into four blunt points.”

“1. Thank goodness for former officials who speaks their minds. And the shoe-leather reporters who catch up with them. More from my friend Rob Schmidt:

“James Kidney, who joined the SEC in 1986 and retired this month, offered the critique [of agency timidity] in a speech at his goodbye party. His remarks hit home with many in the crowd of SEC lawyers and alumni thanks to a part of his résumé not publicly known: He had campaigned internally to bring charges against more executives in the agency’s 2010 case against Goldman Sachs Group (GS) The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “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.”


Read full Bloomberg Businessweek article here.

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