On Wednesday, the SEC's Office of Inspector General (OIG) released a report clearing the SEC of accusations that its decision to bring a fraud case against Goldman Sachs, as well as the timing of its decision to do so, were influenced by a political agenda.
The report was conducted by the OIG in response to a written request from Congressman Darrell Issa and other Members of Congress calling for an investigation into allegations that SEC employees coordinated with the White House, members of Congress, and Democratic political interests concerning the SEC’s fraud case against Goldman Sachs. In July, Congressman Issa requested that the OIG broaden its investigation to look into the question of whether the timing of the SEC’s proposed settlement with Goldman Sachs was related to the passage of the Dodd-Frank Act, and the OIG examined this question as well. Although certain portions of the report were redacted prior to public release, the majority of the content is now available on the SEC’s website.
According to the report, the OIG found no evidence that the SEC coordinated its action against Goldman Sachs with the White House, any member of Congress, any Congressional employee, or any Democratic political committee. Moreover, the OIG did not find any evidence that the SEC’s action against Goldman or its settlement with Goldman were related to or intended to influence financial regulatory reform legislation. The OIG did find, however, that the SEC staff were not fully compliant with SEC rules, since they did not make every effort to alert Goldman that the action was being filed prior to its actual filing.