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(the "SEC") and is effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, nor shall there be any sale of the securities in any state or jurisdiction in which such an offer, sol... more.
Four Other Lawyer Whistleblowers are Essential at the Carmen Segarra Senate Witness Table
James A. Kidney, Former SEC Trial Attorney
James A. Kidney, Former SEC Trial Attorney On March 27 of this year, a 28-year legal veteran at the SEC, James Kidney, used the occasion of his retirement party to deliver a blistering assessment of the regulatory capture at this key Wall Street watchdog. Kidney castigated upper management at the SEC for policing "the broken windows on the street level" while ignoring the "penthouse floors. Kidney further noted that "On the rare occasions when Enforcement does go to the penthouse, good manners are paramount. Kidney correctly characterized the demoralization of his legal peers at the SEC and its revolving door to Wall Street, stating that the best and brightest "see no place to go in the agency and eventually decide they are just going to get their own ticket to a law firm or corporate job punched. (Retirement Remarks of SEC Attorney, James Kidney (Full Text).) The American Lawyer published excerpts from 2,000 pages of documents it had obtained from the SEC under a Freedom of Information Act (FOIA) request, which revealed that Kidney had pushed the SEC to investigate higher ups in the Goldman Sachs Abacus 2007-AC1 investment scam. In other words, except for the nature of the scam, James Kidney is telling the very same story about his experience attempting to regulate Goldman Sachs as Segarra is now revealing about Goldman Sachs and the New York Fed - with tapes to back it up.
Former SEC attorney, James Kidney, has pressured the SEC to investigate Goldman Sach's executives for their involvement in the 2007 Abacus 2007-ACI investment scam.
When Mr. Kidney retired from the SEC in March of 2014, he commented in his retirement speech, "on the rare occasions when enforcement does go to the Penthouse, good manners are paramount.
WARNING RANT BOARD « Capitalsynthesis Forum
On March 27 a retiring Securities and Exchange Commission prosecutor, James Kidney, said that his prosecutions of financial criminals at Goldman Sachs and other giant US banks were blocked by SEC political appointees who "were focused on getting high-paying jobs after their government service."
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." 2. Kidney confirmed what revolving-door critics have been saying. Namely, that SEC higher-ups are more focused on getting lucrative jobs after their government service than on bringing difficult cases. Kidney, 66, has worked at the agency since 1986, except for a four-year stint at Aetna. He earned his law degree at night from George Washington University while working as a journalist. "I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket," he said. Maybe if "we the people," acting through our representatives on Capitol Hill, paid talented civil servants wages commensurate with their value to society, more people such as Kidney would devote their careers to protecting the public good. Maybe they'd even rise through the ranks to set tougher policies. 3. Don't get fooled by the statistics. Kidney made a critical point about the numbers the enforcement agencies throw around. The SEC, he said, should focus on the quality of its actions, rather than on filing as many as possible to promote its record to lawmakers and the media. "It is a cancer," Kidney said of the agency's misleading use of numbers. SEC penalties, he added, have become "at most a tollbooth on the bankster turnpike." 4. And yet, Kidney didn't address the cry to throw more bankers in jail. Let's remember that the main complaint from critics of government enforcement is not so much that the SEC failed to extract additional civil settlements, but that criminal prosecutors didn't try to put Wall Street big shots behind bars. Kidney appropriately limited his comments to his area of expertise: civil suits seeking money damages in which the government does not have to prove culpability "beyond a reasonable doubt. That exceedingly high criminal standard of proof is, to put it plainly, really, really difficult to overcome in situations in which bankers argue they were, at worst, greedy or incompetent or both. The hard truth is that it's well nigh impossible to convince a jury that a guy in a pinstripe suit who plays shell games with credit-default swaps (and what are those again?) is akin to a bank robber caught on surveillance pointing a gun at a teller. Still and all, Kidney deserves a serious hearing and our thanks.
James Kidney, a respected trial attorney for the SEC, drew attention recently when he asserted in his retirement speech that the agency's pervasive "revolving door" has led to a paucity of enforcement actions against seemingly untouchable Wall Street executives.
More than two dozen current and former SEC officials that I have interviewed about these matters largely agree with Kidney on the takeaway: Quite simply, American investors can no longer expect the protection they once did, and that powerful Wall Street executives who have violated the law will continue to go unchecked.