A longtime trial attorney for the SEC had some brutal parting shots for the agency. Given as remarks at a goodbye party the attorney, James Kidney, condemned the SEC for letting the larger Wall Street firms get away with crimes. Essentially claiming that the SEC never went after the powerful.
Kidney joined the SEC in 1986 and in 2010 is said to have been internally campaigning for the SEC to take a harder line in the case against Goldman Sachs.
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.”
Then Kidney really put a turd in the punchbowl.
With nothing to lose he said the unthinkable, that the SEC like so many agencies “regulating” Wall Street is filled with people who want to ultimately work on Wall Street – which compromises their integrity.
Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.”
It is one thing for progressive activists to condemn the revolving door at the SEC and other Wall Street regulatory agencies, it’s quite another for someone on the inside to say it. Kidney essentially confirmed everyone’s worst fears – that the regulators have been captured by the businesses they are supposed to be regulating and that the law only applies to some.
The SEC declined to respond to Kidney’s speech.