SEC maakt politieke ruimte voor hervormingen

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Klinkt goed: "Any banking industry lobbyist is going to have to do some
explaining first, any data they cite will be suspect. The Obamists are
learning, they aren’t giving the (R)s room on the populist side of the
issue. Teabaggers are going to have to oppose government regulation in
the face of criminal evidence."

Groet / Cees

SEC finally lights fire under Goldman smoke
http://blogs.reuters.com/columns/2010/04/16/sec-finally-lights-fire-under-goldman-smoke/
Apr 16, 2010 15:02 EDT

The Securities and Exchange Commission has lit a fire under all the
smoke billowing around Goldman Sachs. The bank has become the popular
totem for public anger over Wall Street greed. But so far Goldman has
been embroiled in little more than a war of words. Now the SEC has
accused Goldman and one of its employees of securities fraud related to
how they structured and sold a synthetic collateralized debt obligation
backed by subprime mortgages in 2007. The stakes couldn’t be higher.
After all, despite all the smoke about Goldman’s conflicts of interest,
clients have hardly run from the building. The firm still sits atop, or
near it, in many investment banking and stock sales businesses. And in
2009 it traded with 6,000 customers, a third more than three years
before. That helped the firm make a whopping $13.4 billion last year.

It’s unlikely all those clients consider Goldman to be a paragon of
virtue. Many probably even scoffed a bit at Chief Executive Lloyd
Blankfein’s insistence in last week’s letter to shareholders that the
firm only acts in the interests of its customers.

But the SEC allegations, which Goldman disputes, lay out a scenario
customers may have feared: Some clients are more important to Goldman
than others, and those without the requisite status can be burned. The
regulator also dragged in the most famous beneficiary of the mortgage
meltdown, Paulson & Co. The hedge fund made $1 billion shorting the
trade the SEC outlines, the same amount lost by investors who bought the
bonds. Paulson isn’t charged with anything — but the case revolves
around allegations that Goldman misrepresented the role Paulson played,
and obscured it from investors.

The SEC’s flimsy reputation may be at stake over the case, but Goldman’s
even more so. The charges alone spooked investors, who wiped out more
than $10 billion of the bank’s equity on Friday morning. They could
scare off some clients too. Some European authorities shunned working
with Citigroup after its “Dr Evil” trade in government securities came
to light in 2004. And Orange County, California, swore off working with
Merrill Lynch — even years after the bank settled charges it sold the
region’s treasurer too-risky investments.

Goldman may eventually be exonerated. But containing the fire lit by the
SEC will be an exhausting endeavor. The bank will be hoping any damage
can be contained to the offending product — which of course smoldered
long ago.


Comments
4 comments so far | Comments RSS
Apr 16, 2010
3:41 pm EDT

The SEC didn’t light the fire, but pinpointed one of its locations. The
arsonists and their accomplices are still at large, blowing even more
smoke in the face of would-be honest investors, but not for much longer.

If I were you, I wouldn’t take a bet on exoneration anytime soon.
Posted by HBC | Report as abusive

Apr 17, 2010
1:06 am EDT

……… “one” of its employees?? Come on, you think one guy dreamed up this
massive international fraud?? Its about time the SEC moved against the
people who have hurt countries all over the world while pocketed massive
profits overnight. Without investigation and prosecution the SEC and
indeed the USA itself has no credibility.
Posted by JJWest | Report as abusive

Apr 17, 2010
1:25 am EDT

This should be fun. I suspect the timing, and the narrow focus, but the
message is unmistakable. Any banking industry lobbyist is going to have
to do some explaining first, any data they cite will be suspect. The
Obamists are learning, they aren’t giving the (R)s room on the populist
side of the issue. Teabaggers are going to have to oppose government
regulation in the face of criminal evidence.

The Feds have deep resources, and lots of time. If they refuse to let
Goldman settle, they will create a boilerplate template for class action
cases complete with supporting evidence for the owners of those $1
Billion Paulson related losses.
Posted by ARJTurgot | Report as abusive

Apr 17, 2010
10:58 pm EDT

We cannot allow GS to skate by on a Congressional scolding and a class
action civil suit.

If crimes were committed in the process of bringing down the largest
economy in the world, then the punishment should fit the immensity of
the crime.

Considering the harm wrought upon America by the parties taking wild
profits with NINA loans, derivatives, CDO’s, credit default swaps, etc.,
I believe that the judicial branch of government should look into
Treason charges.
Posted by breezinthru | Report as abusive

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