Friday, July 23, 2010

Hush little baby don't you cry

Hey, it's just spilled milk. It's not like you did anything wrong.

Guambat has posted almost from day one in his now half-a-decade long blog about the hush money corporations pay the government to hush up instances of wrong-doing.

Just to keep the tally tallying ...:

IN a press release, Dell said Dell Reaches Settlement with Securities and Exchange Commission
The company and Mr. Dell entered into the settlements without admitting or denying the allegations in the SEC's complaint, as is consistent with standard SEC practice.

Dell Agrees to Pay $100 Million to Settle SEC Fraud Claims
Dell Inc. will pay $100 million to resolve U.S. Securities and Exchange Commission accounting fraud allegations in an accord that will let founder Michael Dell stay on as chief executive officer after paying a $4 million fine.

Dell, 45, and the personal-computer maker failed to tell investors about “exclusivity payments” received from Intel Corp. in exchange for not using products made by the chipmaker’s main rival, the SEC said today in a complaint filed at federal court in Washington. Those payments allowed Dell to reach its earnings targets from 2001 to 2006, the SEC said.

“Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws,” SEC Enforcement Director Robert Khuzami said in the agency’s statement. “Michael Dell and other senior Dell executives fell short of that standard repeatedly over many years.”

Dell’s former CEO, Kevin Rollins, 57, and James Schneider, 57, the company’s former chief financial officer, agreed to pay fines of $4 million and $3 million, respectively. Schneider was suspended from appearing or practicing before the SEC as an accountant for five years. The SEC, as urged by the company in its settlement proposal, spared Michael Dell similar punishment.

“We are pleased to have resolved this matter,” Michael Dell said in a statement.

“In similar cases, you’d expect the SEC to seek a bar against a senior officer,” said Peter Henning, a professor at Wayne State University Law School. “He’s probably too important to the company and it would have caused too much harm to shareholders,” Henning said of Michael Dell.

Dell should have had Goldman's influence. It could have done much better.

U.S. SEC voted 3-2 to settle with Goldman Sachs
The two Republican SEC commissioners, Troy Paredes and Kathleen Casey, voted against the settlement. They also dissented when the SEC decided to file fraud charges against the bank.

Goldman agreed to pay $550 million to settle charges over how it marketed a subprime mortgage product, the SEC said on Thursday.

Goldman Sachs Doubled Lobbying Expenses Amid Financial Revamp, SEC Probe
Goldman Sachs Group Inc. doubled its lobbying expenses as it focused on proposed financial regulations and faced U.S. Securities and Exchange Commission charges that it misled investors.

New York-based Goldman, which paid $550 million last week to settle the SEC suit, spent $2.7 million to lobby during the first six months of 2010, more than double the $1.3 million it spent during the same period a year earlier, according to new congressional filings.

Just how much stern influence Goldies can bring to bear will be indicated in how much follow through, IF ANY, there will be to the following stories.

Goldman Sachs Can’t Say It Dodged This F-Bomb: Jonathan Weil
While the Securities and Exchange Commission’s fraud lawsuit against Goldman Sachs may be over, the myths about what’s contained in the settlement agreement seem to have taken on a life of their own.

There’s been so much misinformation floating around on this subject that it’s time to set the record straight. Contrary to many reports over the past week, the SEC didn’t back off any of its fraud allegations. Nor will Goldman be allowed to deny the SEC’s harshest accusations. Yet over and over, articles and analyst reports keep popping up asserting otherwise.

The SEC made two sets of claims in its complaint alleging that Goldman and Tourre intentionally committed fraud, i.e., the F-bomb. The first fell under a section of the Securities Act of 1933 called 17(a). The second was under the better-known Section 10(b) of the Securities Exchange Act of 1934 and an accompanying rule known as 10b-5, which, like 17(a) and 10(b), prohibits fraud in the sale of securities.

Goldman settled the case without admitting or denying the commission’s allegations, which remain unproven. Tourre is contesting the SEC’s claims.

With that backdrop, here are some of the myths that have found their way into the media food chain lately, and the reasons why they are bunk.

Myth No. 1: The SEC’s fraud allegations against Goldman have evaporated.

Not true. The judgment order in the case says Goldman “consented to entry of this final judgment without admitting or denying the allegations of the complaint.” It didn’t strike any of the complaint’s allegations. Neither did Goldman’s consent decree. Nor did the SEC amend its April 16 complaint.

The upshot: The SEC didn’t withdraw any of its fraud allegations against Goldman.

Myth No. 2: The SEC dropped its 10(b) fraud claim as part of the settlement.

This bit of fiction seems to stem from the fact that the injunction in the judgment order permanently bars Goldman from violating 17(a) in the future, but doesn’t contain any reference to 10(b). (The injunction, in effect, places Goldman on probation with the SEC.)

The reality is that the SEC’s complaint still contains an unadjudicated accusation that Goldman violated 10(b). The injunction is part of the remedy in the case, not part of the SEC’s allegations -- which remain unchanged. Had the SEC stricken the 10(b) claim from its complaint, Goldman would have been allowed to deny it violated this section of the law. However, the SEC didn’t do this.
SEC internal probe will look at timing of Goldman Sachs settlement
SEC Inspector General David Kotz said that he will look into "the circumstances surrounding the timing of the SEC's settlement reached with Goldman on July 16," according to a letter seen by Reuters.

The SEC's inspector general had already begun investigating the suit in April, after Republicans in Washington suggested political motives may have been behind the timing of the SEC's decision to sue Goldman over the marketing of the product, called Abacus 2007-ACI.

The commission had voted 3-2 to file the suit against Goldman, with the two Republican commissioners dissenting.

Republican Rep. Darrell Issa, R-Calif., had asked Kotz to open an initial probe into the timing of the suit in April. The letter Thursday, which agreed to expand the probe to look at the settlement's timing, was also addressed to Issa.

Republicans questioned why the SEC case was filed just before the Senate was due to start formally debating a bill to usher in new rules for Wall Street.


Stop Complaining, Wall Street By Daniel Gross
The Senate's passage Thursday night of extensive financial reform is being portrayed as a big loss for the financial sector. [But] only because the default situation for the last 30 years has been that the financial sector gets precisely the regulation it wants.

Given what the financial sector put the nation through in the past three years, the case for strong punishment was very compelling. But while there are provisions that the financial sector doesn't like, the legislation that is now headed to a House-Senate conference is in fact relatively tame.

What may be most striking to average Americans about the bill is actually how un-punitive it is.

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