SEC Shouldn't Knife Goldman on a Split Vote

Fraud charges too serious to bring without even 5 people onboard
By Kevin Spak,  Newser Staff
Posted Apr 20, 2010 12:21 PM CDT
Securities and Exchange Commission (SEC) Chair Mary Schapiro testifies on Capitol Hill, March 17, 2010.   (AP Photo/Haraz N. Ghanbari)

(Newser) – When the SEC charged Goldman Sachs with fraud, it rocked global markets and cost Goldman shareholders $12 billion—all for a charge that only 3 of the 5 SEC commissioners could agree to. That just seems wrong to Henry Blodget of Business Insider. “Fraud is a serious charge,” he says. “The assessment should not depend on one's political perspective.” Yet the vote split on party lines, with the panel's two Republicans in opposition.

That's especially staggering because the Goldman decision was sure to be popular, and after Madoff, Stanford, and the financial crisis, the SEC badly needs a win. “Yet despite this huge incentive to move forward, 40% of the SEC decision-makers decided the charge was unwarranted,” Blodget writes. We need financial reform all right—reform that ensures regulation has nothing to do with politics.

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