NEW YORK (
) -- For those innocents who think it is just a coincidence that
The Wall Street Journal
has once again topped its front page with stories about criminal investigations of Wall Street banks, allow me to inject a dose of reality into that cream-filled donut you are about to swallow.
Sweeping regulatory reform is making its way through Congress, and the Obama administration has clearly decided that leaking news about investigations of Wall Street banks is the way to get the legislation it wants.
Rochdale Securities analyst Dick Bove, a veteran who has seen a few Wall Street crackdowns in his day, argues that the fact that the
Securities and Exchange Commission
is working together with the U.S. Justice Department on the investigation suggests the hand of the Obama administration is behind it.
"The President has demonstrated with the health care bill that he doesn't back off until gets what he's attempting to achieve," Bove says. "With the financial regulation bill he's showing the same level of tenacity. We're getting almost a programmed set of announcements every couple of days concerning something that was done wrong on Wall Street."
Bove made these comments to me Wednesday, following
as reportedly being the subject of a criminal inquiry into its disclosures regarding collateralized debt obligations it helped create.
The analyst looked especially smart when I opened the same newspaper Thursday to read that
are also reportedly being investigated.
The New York Times
, meanwhile, despite the fact that its owners and editors appear far more sympathetic to the idea of a Wall Street crackdown than those at
The Wall Street Journal
, has to settle for a leak from New York Attorney General Andrew Cuomo for its page. Cuomo, the newspaper reports, is looking into whether banks passed false or misleading information to bond ratings agencies to get higher ratings for securities they created.
If I were Obama, I'd leak to the
too. He knows the
will bash Wall Street on its own, while the
has regularly demonstrated its willingness to go after Congress instead, with articles detailing questionable expenses, or short selling by elected officials. Give them a few leaks, and they may lay off those stories a bit, or feature them somewhat less prominently.
Still, clever public relations strategies can easily backfire. Wall Street can only hope this one will.
Written by Dan Freed in New York
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