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The Daily Beast Has a Little Disclosure Problem...

Harvey Pitt:

The SEC's Dangerous Gamble: With rules or policy decisions, some divided votes may be inevitable. But, the agency usually doesn’t split on enforcement actions, and especially not along party lines. Could more time have produced a different result? We won’t know. But, what was the rush? After a year-and-a-half of investigation, eight months after receiving Goldman’s “Wells Submission,” was there a need to file the litigation when it was filed? Why didn’t the five Commissioners take more time to try and find common ground? What was the need that compelled the filing of the action last Friday, instead of, say, this Friday, or next?... Government suits affect the target’s share price, as occurred here, and also adversely affect its reputation and potential business. In those respects, Goldman has already lost. Arthur Andersen ultimately prevailed in the Supreme Court, after losing in the lower courts. But its victory was Pyrrhic, and came long after the real stakes had been decided. Goldman’s a strong firm with an illustrious history. But if the economic collapse of 2007-2008 demonstrated anything, any firm can falter if its credibility is called into question. In this litigation, either the SEC, or Goldman, is betting the proverbial farm, or perhaps, they both are...

The Daily Beast:

An earlier version of this article neglected to note that Harvey Pitt has done work for hedge fund manager John Paulson, who helped Goldman Sachs develop the product at the center of the SEC’s case but has not been sued in the matter.  We regret the error. Mr. Pitt noted: “I had no involvement in these transactions nor with the SEC's decision whether, and whom, to sue. My article doesn't mention Paulson or discuss its role, other than to paraphrase the SEC's allegation.”

Why oh why can't we have a better press corps?

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