GOP Is Suspicious of SEC's Timing Against Goldman Sachs

Darrell Issa, the top Republican in the House Oversight Committee, wants to know how and why the SEC's civil charges against Goldman Sachs happened the way it happened.

GOP seeks SEC records on Goldman (Mike Allen, 4/20/2010 Politico)

"Rep. Darrell Issa, the top Republican on the House Oversight committee, is demanding a slew of documents from the Securities and Exchange Commission, asserting that the timing of civil charges against Goldman Sachs raises “serious questions about the commission’s independence and impartiality.”

"Issa’s letter, addressed to SEC Chairwoman Mary Schapiro and signed by eight other House Republicans, asks whether the commission had any contact about the case, prior to its public release, with White House aides, Democratic Party committee officials, or members of Congress or their staff.

"“[W]e are concerned that politics have unduly influenced the decision and timing of the commission’s controversial enforcement action against Goldman,” Issa writes.

"Issa implied that the timing was a bit too convenient, saying President Barack Obama’s push on Wall Street reform “neatly coincided with the commission’s announcement of the suit.”" [The article continues.]

How "coincidental" was it? The letter says the following:

--The Commission approved the Goldman suit in a vote that spit along party lines – a rare occurrence for approvals of enforcement litigation.

--Before the Commission had released its announcement, the New York Times published on its website a story describing the suit.

--Less than half an hour after the Times story’s publication, Organizing for America, the successor organization to Obama for America and now a project of the Democratic National Committee (“DNC”), sent millions of supporters an e-mail message from President Obama urging support for “Wall Street Reform.”

--Within hours, the Democratic National Committee had purchased AdWords advertising from Google, Inc. The DNC’s Google campaign fundraising advertisement, headed “Fight Wall Street Greed,” appeared whenever a user ran a Google search for the phrase “Goldman Sachs SEC.” It read, “Help Pres. Obama Reform Wall Street and Create Jobs. Families First!” and included a link to www.BarackObama.com, the website of Organizing for America.

--Democrats in Congress and the Administration have heralded the Commission’s suit against Goldman as a welcome boost to their case for the legislation.

--Members of the media have already begun to question the timing of the Commission’s suit and the actions of the Democratic National Committee.

Oh nothing but just coincidence, says the White House press secretary, who is reportedly very keen on becoming the lead political strategist for Obama.

The 2nd point above was what tanked the shares of Goldman Sachs and the whole stock market on an option expiration day (which tends to be volatile even without any news).

How the hell did these two New York Times reporters (this and this) get the SEC announcement before it was released?

The 3rd point is also interesting, as I remember seeing a message on a stock message board urging people to support President Obama in his financial reform bill to punish Wall Street. And the poster didn't even know what's in the bill.

Not that I am a fan of the Vampire Squid, aka Goldman Sachs, but a contrarian in me is suspicious when things are choreographed in-your-face manner like this in order to force you to think in a certain way and no other (which has been the case since the days of George W. Bush, and hasn't changed one iota - actually it has gotten worse). I have to say I'm more than annoyed as a trader because they pulled this stunt on an op-ex day.

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