The Washington Post has an interesting story on the 3-2 split on the Securities and Exchange Commission over whether to file charges against Goldman Sachs. According to the story, Republican appointees Kathleen Casey (a former Hill aide) and Washington Univeristy law professor Troy Paredes, “were skeptical that the evidence showed that Goldman had misled its clients because the investors were big, sophisticated firms who should have known what they were doing.” They also raised concerns that filing a flawed case could hurt the agency’s reputation, which is already smarting from its failures to uncover the Madoff ad Stanford fraud schemes.
The dissenting commissioners are not the only ones to raise questions about the SEC’s case. Sebastian Mallaby and David Zaring also have questions. Professor Bainbridge also looks at the suit’s timing.