Government Law

In scathing farewell, SEC lawyer says agency penalties just a 'tollbooth on the bankster turnpike'

A longtime trial lawyer for the Securities and Exchange Commission had some harsh words for the agency and the people who work there in his retirement speech last month.

James Kidney said his bosses were more interested in high-paying careers after their stints at the SEC than on bringing difficult cases. And he said the agency’s penalties were no more than “at most a tollbooth on the bankster turnpike.” Bloomberg News obtained a copy of the remarks and contacted Kidney, who said he was offering constructive criticism and he will always be an SEC loyalist. Above the Law noted the story.

“I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket,” Kidney said. “They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.”

The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

Kidney had campaigned within the SEC to bring additional claims against Goldman Sachs executives, but he told Bloomberg he wasn’t singling out any specific cases or executives. The bank agreed to pay $550 million, without admitting liability, to settle SEC claims that it misled investors about toxic mortgage-related securities.

Bloobmerg contacted an SEC spokesman, who declined to comment.

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