TheCorporateCounsel.net

April 23, 2010

Now Available: “Final” Dodd Bill

Last week, Senator Dodd formally introduced an updated version of his bill (S. 3217), now weighing in at 1410 pages rather than a portly six pounds.

This version is the one officially filed with the Senate by the Senate Banking Committee (and which passed the Committee) – so it incorporates the Manager’s Amendments added by the Banking Committee. There are lots of other changes to the bill compared to the one released in mid-March – but there were no further changes to any of the corporate governance or executive compensation sections.

SEC’s Statement on Its Independence: Proof that Self-Funding is Necessary

On Wednesday, SEC Chair Schapiro issued this statement about the agency’s independence from the President, Congress, et. al. As noted in this NY Times article, this statement primarily was made to respond to a letter from Republicans on the House Oversight Committee that accused the SEC of political motivations in its pursuit of a case against Goldman Sachs. The article also notes that President Obama addressed charges of collusion by stating, “never discussed with us anything with respect to the charges.”

To me, the need for the SEC to issue such a unique statement is one more example of why it needs to be self-funded (here is my first blog on the topic). As I recently noted in a comment to this blog, self-funding is not really about paying Staffers more to do their jobs (or adding more resources generally) – it’s freeing the SEC from the Congressional appropriations process so that it can do its job free from political interference.

The SEC’s 3-2 Vote on Charging Goldman Sachs: Is That Unusual?

In his “Race to the Bottom” Blog, Professor Jay Brown blogs about the 3-2 decision in a closed Commission meeting to bring the charges against Goldman Sachs. Jay bemoans the leak to the press – and notes that the split vote fell along party lines.

As noted on our webcast last week with former senior SEC Enforcement Staffers, it is relatively rare for the Commission to be so split behind closed doors (it’s more common for 3-2 votes on rulemaking proposals). But it does happen (eg. cases a few years ago imposing penalties on public companies) – and obviously, this is an important case. The fact that the split would be along party lines is something that is probably new to this era of a politicized independent agencies. I doubt it happened like this 20-30 years ago.

As noted in this Washington Post article today, the divided decision has no bearing in court (at least directly) – I take the divided decision to either mean that it was a close case or that there was some political aspect that produced the split. Harvey Pitt notes in the article that the split decision could harm the SEC’s reputation. Goldman officials will testify before the Senate Permanent Subcommittee on Investigations on Tuesday.

Poll Results: SEC v. Goldman

Here are the results from the poll that I conducted a few days ago regarding the SEC’s Goldman case:

– It will drag on in courts for years – 20/7%
– It will be settled within a few months – 28.9%
– Some mid-level Goldman staffer thrown under bus – 29.6%
– Some big Goldman honchos suffer badly – 10.4%
– Goldman will lose big – 13.3%
– SEC will lose big – 20.7%
– Both parties come out even – 10.4%
– What me worry? – 5.2%

– Broc Romanek