Regulator Quick To Point Finger of Blame, Yet Slow to Admit When It Loses

Pointing The Finger

When the Securities and Exchange Commission sued Edward Steffelin last year, the agency issued a press release telling the world it had accused him of fraud. So how did the world first learn that the SEC had dropped its claims against him ?

Bloomberg columnist Jonathan Weil says that it wasn't from the SEC. New York Times columnist James Stewart broke the story.

As of midafternoon Monday, there still was no mention on the SEC’s website of the fact that the case against Steffelin had been dismissed on Nov. 16. Every document on the website that mentions his name makes him out to be a fraudster. (Steffelin, 43, a former GSC Capital Corp. executive, was sued in June 2011 over his work on a JPMorgan Chase & Co. (JPM) collateralized debt obligation that defaulted.)

The SEC is more than happy to issue unflattering public statements when it sues people or reaches settlements with them. When the defendants win, however, the SEC tends to keep quiet.

In May, for instance, a federal judge in California dismissed all of the SEC’s claims against Scott Keys, the former chief financial officer of the failed thrift IndyMac Bancorp. In February 2011, the agency’s public affairs office issued a press release trumpeting the securities-fraud allegations against him. The SEC’s enforcement division issued a separate release saying he 'participated in the filing of false and misleading disclosures'. The case against Keys has been closed for almost six months. Yet the SEC still hasn’t updated its statements about him on its website.

Hit the link below to access the complete Bloomberg article:

The SEC’s Braggadocio Mysteriously Disappears

Jonathan Weil joined Bloomberg News as a columnist in 2007, and his columns on finance and accounting won Best in the Business awards from the Society of American Business Editors and Writers in 2009 and 2010.

Weil was a reporter for The Wall Street Journal from 1997 to 2006, and before that at the Arkansas Democrat-Gazette in Little Rock. He grew up in Hollywood, Fla., and has a bachelor's degree from the University of Colorado at Boulder and a law degree from Southern Methodist University.

image: © Lisamarie Babik

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