Goldman Sachs: Has The SEC Finally Grown a Pair Under Mary Schapiro?

We may be witnessing the first real signs of a newly empowered SEC under chair Mary Schapiro. She’s been in the job for over a year, and while critics have been on her for a slow start and giving Wall Street a pass, it must be noted that she’s had her work cut out for her. As Congress gears up to pass financial reform, Schapiro finally seems to have started to turn the SEC back toward its stated purpose of regulating, rather than enabling, Wall Street. This has required a complete about-face, and all the metaphors of turning around the Titanic apply here. Remember, this is an institution that over the last decade completely whiffed on some of the biggest cases of fraud in the country’s history: Madoff, Enron, and Worldcom, not to mention helping sow the seeds of the financial crisis through lax regulation. Under her three Bush-appointed predecessors, Harvey Pitt, William Donaldson, and Christopher Cox, (the guy McCain wanted fired in ’08) the SEC was basically the fox guarding the henhouse, ceding authority to the financial institutions it was supposed to be regulating.

Judging by the details of the charges -- which contain emails from Goldman employees, including the “Fabulous” Fabrice Toure, a 31 year-old Goldman VP allegedly most responsible for the fraud -- this took some serious sleuthing by SEC investigators. It also sheds light into the role Goldman played in helping hedge fund billionaire John Paulson make so much money off the crash.