John Paulson adds ex-SEC chairman and commissioiner toboard of directors

New York Post
By KAJA WHITEHOUSE
Saturday June 12, 2010

In what appears to be a move to protect his firm from getting further ensnared in the Securities and Exchange Commission's legal spat with Goldman Sachs, hedge fund titan John Paulson has enlisted two high-profile former SEC officials to act as consultants to him and his firm, The Post has learned.

In a letter to investors yesterday, Paulson announced he has added former SEC Chairman Harvey Pitt and former SEC Commissioner Roel Campos as "independent directors" to the firm's board of directors, sources tell The Post.

Pitt was chairman of the regulatory agency from 2001 to 2003, and Campos served as a commissioner from 2002 to 2007.

While Paulson's not been charged with any wrongdoing, his name has been marred by the SEC's allegations that Goldman Sachs deceived customers about his role in mortgage security offerings that imploded during the housing meltdown. According to the SEC, Goldman let Paulson, who was betting the product would fail, cherry-pick many of the tranches backing the security while telling investors they would be selected by an independent manager.

Reached at his office, Campos confirmed the appointment, but declined to comment on whether Paulson is looking for advice on dealing with the SEC's probe. "I'm looking forward to it and I wouldn't do it unless I thought he was a great shop and ethics were the word of the day."

Pitt, who didn't immediately return a request for comment, has consulted for Paulson in the past. He also created a bit of a firestorm by publicly criticizing the SEC's handling of the case and suggesting it was politically motivated.

A person close to Paulson said his firm had been in talks with the two former regulators for six to eight months before the SEC's lawsuit emerged.


Great Commentary by Robert Wenzel of EconomicPolicyJournal.com
Sadly this is where the country is headed. For your own protection, if you have the bucks, you hire those surrounding the pockets of power.

The only way to end this nonsense is to eliminate the pockets of power. Outside of being a smooth operation that grows these private sector beasts, the SEC has done absolutely zero since its inception, other than create barriers of entry for those who want to compete against the insider elite that have captured the SEC.