The head of the Securities and Exchange Commission said Wednesday there was no connection between the timing of the agency's fraud charges against Goldman Sachs and efforts in the Senate to speed passage of sweeping legislation overhauling financial regulation.
SEC Chairman Mary Schapiro was speaking to a Senate panel weighing the agency's budget request. Some Republicans have accused the SEC of timing the April 16 announcement of civil fraud charges against Goldman to bolster prospects for the legislation, now at a critical stage in the Senate.
Schapiro, asked if there was a connection, said "absolutely not. We don't time our enforcement actions by the legislative calendar."
"We bring our cases when we have the law and the facts," Schapiro said in answer to a question from Sen. Susan Collins of Maine, the senior Republican on the Senate Appropriations subcommittee.
The SEC chief reaffirmed that there was no link between the timing of the agency lawsuit against Goldman, which followed a monthslong investigation of the investment bank, and the push for the legislation in the Senate. Last week, amid Republican speculation, President Barack Obama denied any White House involvement in the timing of the SEC case.
The intrigue was heightened by the revelation that the SEC commissioners approved filing of the charges against Goldman on a 3-2 vote, along party lines, with both Republicans opposing the move.
The agency's charges against Wall Street's most powerful firm did embolden Democrats in their criticism of Republicans who oppose the Obama administration's financial overhaul proposal — even though measures in the plan might not have prevented the transactions said to be involved in the Goldman case.
The SEC's suit accuses the firm of misleading investors about securities backed by subprime home loans. The agency alleged that Goldman concocted mortgage investments without telling buyers they had been put together with help from a hedge fund client, Paulson & Co., that was betting on the investments to fail.
Goldman disputes the charges and says it will contest them in court.
Goldman executives made their case Tuesday in the court of public opinion, as they appeared before a Senate panel and defended the firm's conduct in the run-up to the financial crisis. Goldman CEO Lloyd Blankfein told skeptical senators that clients who bought mortgage securities from the firm in 2006 and 2007 came looking for risk "and that's what they got."
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.