An internal watchdog at the Securities and Exchange Commission declared void the accusations that said the regulator acted on political influence during its landmark fraud case against Goldman Sachs.
It, however, questioned the SEC for violations of its own policy as the regulator failed to warn Goldman Sachs of an imminent fraud charge.
The report, prepared by the SEC inspector general, negated the claims made by some Republican legislators that SEC officials timed the Goldman case in such a manner that it allowed the Democrats to pass an overhaul of financial regulation.
The report, however, indicates that senior officials at the SEC timed the case to garner broader media attention. The report says the SEC officials had reservations about the press strategy of Goldman and acted rather complacently in intimating the company about the impending fraud case, which is a violation of SEC rules, though the delay was just about "10 minutes."
The SEC alerted Goldman in summer 2009 of its intentions of filing a case in September. The enforcement staff delayed the filing citing incomplete work with January 2010 being set as the new date; the case was later pulled from the calendar after opposition by Republican commissioners and after conflicts with a Senate subcommittee probe.
The case was finally filed on Friday, April 16, when it accused the banking giant of selling sophisticated European financial firms a complex financial security, which was designed in such a manner that it was bound to fail.
Goldman ultimately agreed to pay a $550 million penalty to settle the charges without admitting or denying any wrongdoing.
