Can the SEC Beat Goldman Sachs?

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No!

Tom in San Diego of CA 9:29PM April 30, 2010

The way all the Options, derivatives work is to defraud the little investers and fill up the pockets of the senior people working for these greedy investment houses and more importantly BANKS now that the investment and banks have become one and the SAME. The Laws have to change so that the little investor can compete with these gaints that use your money as taxpayer, how shmeful.

neil of MI 8:12PM April 28, 2010

Yes folks, that is what our banking system has become. Just look at the outrageous way they control congress and managed to get the laws and regulations changed so they could plunder the pillage our society. If this sounds out of bounds to you I suggest you do some research. The revolving door between the highest financial positions in our governement and wall street is working very well.
Do you honestly think anyone at GS will pay for the fraud they perpetuated on the American people? And don't you know there were others of this mafia that did the same thing?
All this after 8 years after Dick Cheney as our shadow president. What did you expect?
What a mess.

Objective Observer of OK 1:40AM April 21, 2010

Wonder, what Warren Buffet has to Say??

TTChow of NY 12:25AM April 19, 2010

Wonder, what Warren Buffet has to Say??

TTChow of NY 12:25AM April 19, 2010

It's amazing that no one seems to realize that what Goldman and others were doing was just plain old-fashioned gambling. Calling it some kind of financial investment is the biggest BS that is being perpetuated on the american people. Is this any different than what happens in Las Vegas (or with your illegal bookie)? No. People are betting on whether this team or that team wins, except on Wall street and within the elite financial community they call it investing. The probelm is that everyone is greedy and wants to make a lot of money doing nothing.

Romas of IL 3:54PM April 17, 2010

I meant Skank Paulsen had $550,000,000 worth of Goldman stock . Sorry. RH

Ron Halverson of WI 9:27PM April 16, 2010

Did I miss something here or was it TRMS? Bush Treasury Sec. was Skank Paulsen who had, if my memory serves, $550,000 of GS stock when they (he) bailed GS out first. Is this latest Paulsen mentioned this evening perhaps closely enough related to begin a RICO discussion? Just asking. Ron Halverson--Prescott WI---Proud liberal hawk

Ron Halverson of WI 9:24PM April 16, 2010

1) If you had the astronomical income tax rates for astronomical incomes THAT WE SHOULD HAVE AND ONCE HAD, this stuff would not even be happening.
2) I'd kinda like us see the taxpayers get back the $13 billion that AIG got from government and paid to Goldman as a "counterparty" it supposedly owed.
3) The American psyche would be improved by the SEC bashing Goldman. This outfit is a household poster-child name and prime example of high-browed leeches sucking money out of the American economy.

Muser of NM 9:09PM April 16, 2010

In other words, because proving intent is extremely difficult, the SEC could not until now go after Goldman, and other big banks, even though "everyone knew" that such sophisticated institutions had to have been aware that they were encouraging bad lending practices so as to profit off even the worst mortgages. (Indeed, the stuff was referred to in the industry as "toxic waste.") Yet merely making money off naive investors is not an SEC violation, and it's hard to prove that a bank knew that an investment would crash sometime in the future. What the Feds needed to show was that Goldman had actual information that was material to an investor's decision to invest, and didn't disclose that information.
That's why the Paulson connection is key -- because if there is a paper trail showing that (1) Paulson was trying to buy risky stocks, and was also purchasing short positions, and (2) that Goldman knew this, then Goldman had an obligation to disclose those facts to investors, regardless of whether Goldman really believed that the investment would crash. In other words, it doesn't matter what actually happened to the investment; you don't have to prove (almost impossible) that Goldman saw into the future (although it did). All you need to show is that a material fact wasn't disclosed.
It looks as though Goldman was so arrogant as to move from taking big risks and hedging them -- immoral, but legal -- to colluding to ensure that the hedge paid off. This is actually funny, in a sick way, if you think of it as an example of Goldman's "conservatism." They didn't want to take the risk that their risk would not be as risky as they thought -- would not crater -- so they fixed the deal. Kind of like converting the "prudent investor" standard to a "prudent con artist" principle.
Go for it, SEC.

Mary Romeo of NY 6:02PM April 16, 2010