Cox Was Asleep at the Switch
This is encouraging. But, it's also a sign that George W. Bush's SEC chair Christopher Cox should've done more to bring these schemes to light before the global financial crisis. Accountable America's Tom Matzzie:
The SEC's action against Goldman Sachs is a good step in the right direction but more is needed urgently. More than any other Wall Street bank, Goldman Sachs gamed the system to the bank's benefit and to the detriment of the public, taxpayers, investors and the U.S. economy. What Goldman Sachs did was no different than a baseball player placing bets against his own team. In addition to civil action, there should be criminal investigations.
One thing that is also becoming clear is that the SEC under former Chairman Christopher Cox was asleep at the switch. This fraud happened 20 months before Cox left his post as SEC Chair. It is clear that Cox hobbled the SEC when it was most needed to protect the public. We need financial reform to setup structures and rules that make it impossible for a regulator to hobble investor protections. But we also need public accountability for Christopher Cox and other regulators who failed to do their job. The Financial Crisis Inquiry Commission should immediately subpoena Cox to appear at their next hearing. Cox should answer as to why he didn't stop these frauds before they spun out of control and wrecked the U.S. economy. If there was any impropriety by Cox that should not be swept under the rug--it must be exposed.
While this action by the SEC is encouraging, the pace and volume of civil and criminal actions related to the financial crisis is woefully inadequate. During the S&L crisis, a series of strike forces based in 27 cities were staffed with 1,000 FBI agents, analysts and dozens of federal prosecutors. The result was no less than 1,852 S&L officials were prosecuted and 1,072 were jailed. More than 500 of these were top officers. Where are those task forces today? Where are those prosecutors? Where are those investigations? The SEC, the Department of Justice and other agencies need to do more and do it now.
The Financial Crisis Inquiry Commission (FCIC) can hold Christopher Cox accountable. They can seek subpoena powers and make him testify before the committee. It's time for the FCIC to act.