NEW YORK (

TheStreet

) -- The watchdog of the

Securities and Exchange Commission

says the timing of both the agency's announcement of its civil fraud charges against

Goldman Sachs

in mid-April and its settlement with the firm in July were mainly motivated by a desire to get the most press coverage possible and stay on New York Attorney General Andrew Cuomo's good side, not to influence financial reform legislation.

In

a report

issued Wednesday, the SEC's Office of the Inspector General, led by H. David Kotz, said there was no evidence that the initial charges on April 16 nor the July 15 settlement were disclosed in coordination with financial reform legislation, which was eventually passed on July 21.

"The OIG found that the investigation's procedural path and timing was governed primarily by decisions relating to the case itself, as well as concerns about: (1) facts surrounding the investigation's subject matter being publicized prior to the SEC filing its action; (2) maintaining a relationship with the New York State Attorney General; and (3) maximizing and shaping press coverage," the report stated.

Goldman shares were trading above $184 prior to the announcement of the civil fraud charges on April 16, and they plunged in the wake of the news, hitting a 52-week low of $129.50 on July 1. Based on Wednesday's regular session close at $154.73, the stock was down roughly 10% year-to-date.

In its report, the OIG said the SEC was originally authorized to file the charges on April 14, but didn't that day because staff believed they were not ready with the complaint yet. The decision skip it on April 15 was related to "the SEC's desire to avoid filing" on the same day the agency and Cuomo were planning to announce settlements of pay-to-play allegations involving private equity firm The Quadrangle Group.

Of the timing of the settlement, the OIG notes the SEC and Goldman were working under a July 19 deadline for Goldman to answer the civil complaint as well as the July 20 release of the bank's financial results, which "would require Goldman to announce an accounting reserve relating to the prospective settlement with the SEC."

The influence of the press also played a role in the timing of the settlement announcement, as the SEC was concerned about "leaks in the media that might portray the settlement in an inaccurate or misleading fashion."

How Goldman itself might spin the story also came up.

"Testimony and documentary evidence indicate that the SEC staff wanted the SEC to be able to 'shape' the story before Goldman had an opportunity to do so," the report reads.

The OIG also dismisses the idea that the timing of the SEC's charges and settlement with Goldman were coordinated with any other governmental or political entities, and says it found no evidence the SEC shared information about the Goldman charges with news organizations prior to filing its complaint.

--

Written by Michael Baron in New York.

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