I discussed last year the peculiarities of the SEC’s complaint against Goldman arising out of the infamous Abacus transaction. One peculiarity is how John Paulson, whose undisclosed role in structuring the transaction led to the charges against Goldman, has escaped blame.
Today Andrew Ross Sorkin sheds some light on why that might be: a senior SEC lawyer involved in the case, Adam Glass, had previously worked for Paulson in connection with this transaction.
As Sorkin notes:
[Glass’s] role once again raises questions about the revolving door between Washington and Wall Street at a time when public distrust about the agency and its lack of enforcement action against the culprits of the crisis is running high.
He quotes Jack Coffee: “[I]t is a case that will raise further questions about the S.E.C.”
For more on the revolving door problem at the SEC, see my post yesterday on the FCPA.
Given this, and Madoff, and the SEC’s failure to get its regulatory act together, isn’t it about time somebody started raising some really basic questions about the SEC? If it’s really true that the financial markets need a cop, it would seem some attention should be paid to whether we have the right cop.
