SEC Said to Vote 3-2 to Sue Goldman Sachs Over CDO

With this vote along party lines Dems will look very bad if they don’t win it.

>   (email exchange)
>   On Mon, Apr 19, 2010 at 2:37 PM, wrote:
>   the vote was close but I’m not sure it changes much. However the political angle
>   in light of the Administration’s efforts at financial reform cannot be avoided.
>   Government leverage vs. bank leverage…

SEC Said to Vote 3-2 to Sue Goldman Sachs Over CDO Disclosures

By Jesse Westbrook

April 19 (Bloomberg) — The U.S. Securities and Exchange
Commission split 3-2 along party lines to approve an enforcement
case against Goldman Sachs Group Inc., according to two people
with knowledge of the vote.

SEC Chairman Mary Schapiro sided with Democrats Luis
Aguilar and Elisse Walter to approve the case, said the people,
who declined to be identified because the vote wasn’t public.
Republican commissioners Kathleen Casey and Troy Paredes voted
against suing, the person said.

The SEC on April 16 accused Goldman Sachs, the most
profitable company in Wall Street history, of creating and
selling collateralized debt obligations in 2007 tied to subprime
mortgages without disclosing that hedge fund Paulson & Co.
helped pick the underlying securities. Goldman Sachs also didn’t
disclose to investors that Paulson was betting against the
securities, the SEC said.

SEC spokesmen John Nester and Myron Marlin didn’t
immediately return a phone call and e-mail seeking comment.