SEC Brings Fraud Suit Against Goldman Sachs

Monday, April 19, 2010

Stock prices whiz by on a ticker near the Goldman Sachs booth on the floor of the New York Stock Exchange April 16, 2010 in New York, New York. (Chris Hondros/Getty)

On Friday the Securities and Exchange Commission announced a civil suit against Wall Street giant Goldman Sachs, after uncovering what the SEC calls significant evidence of fraud during the run-up to the current financial crisis.

We turn to two guests uniquely situated to look at the accusations leveled against the firm this weekend. Louise Story, Wall Street and finance reporter for our partner The New York Times, first broke the story at the heart of the SEC's suit back in December, and has continued to follow Goldman Sachs' practices since then. University of Maryland School of Law professor Michael Greenberger is a former federal regulator at the Commodity Futures Trading Commission; he describes the SEC's suit as the first possibly successful counter strike by the federal government against Wall Street’s shady practices.

Guests:

Michael Greenberger and Louise Story

Produced by:

Hsi-Chang Lin

Comments [4]

Jim Demers from NYC

Let's wait and see what, exactly, Goldman told the investors. There were plenty of fools at the time who were more than willing to buy a house on fire... and so long as they had the facts, Goldman did nothing wrong.
What I find astounding is that the ratings agencies who slapped "AAA" ratings on this toxic dreck (basically, certifying that the house of fire was really made of cement and cinderblock) have gotten away scott free. Had they done an honest job, none of this would have happened, and I'm very curious to know WHY they didn't do an honest job. Why did they look the other way, hold their noses, and hand out "A"s when it came to rating CDOs, at the same time they were routinely rating junk bonds and bad debt "C" and below?

Apr. 20 2010 05:06 PM

right on the banks need to go down. there is no such thing as a bank or financial institution too big too fail, let them eat themselves and defraud us so much that we go to a cash and barter system only and they can take their fees and interest and float on our money and payments and stick it where the moon dont shine

Apr. 20 2010 11:48 AM
Jack Fletcher from New York

It was a very naive show on Goldman Sachs. You couldn't do your homework and find at least one disaffected financial services expatriate to come clean on the element at Goldman that knew exactly what they were doing in betting against their clients?

And let's stop using the word "complicated" in conjunction with derivatives. Derivatives are only as complicated as the hucksters who create them need them to be. Anywhere you find "complication" on Wall Street, in banking or the credit card industry, you find the money if you care to follow it. You have it on tape if you take the time to listen, when Bankers Trust raked Procter and Gamble over the derivative coals, and Goldman is no different than Bankers, they just have better PR. Make that NPR.

Remember when Wall Street "made money the old fashioned way, they earned it", by advising their clients. Not enough moola in that anymore.

Wall street's credit default swaps with AIG were just one big bet against America, but it didn't occur to Wall Street and the big banks that AIG was playing just as fast and loose as they were and that the swap "insurance policies" had no real money backing them up. Why, because there was no regulation, thanks to the banking hacks and insurance lobbyists on Capitol Hill.

And once again we see, "complication" rearing its ugly head when it comes to financial reform, as evidenced by Jamie Dimon's (CEO of JP Morgan Chase) condescension with respect to the reinstatement of Glass Steigall, calling it a "quaint notion", referring to the depression era legislation that kept investment banks from getting together with commercial banks and leveraging our savings at thirty and forty to one to fund and satisfy the gambling addicts on Wall Street. Thanks to the likes of Larry Summers, Phil Gramm and Robert Rubin, who gutted the act on behalf of Citigroup, we're defenseless.

Rubin could barely wait for the the deed to be done before he resigned the Treasury and showed up on the payroll over at Citi to the tune of $100 million plus in cash and other goodies. It's not complicated, it's just corrupt. Oh my God, there I said it.

There will be no true financial reform. How do we know, because the gangster bankers haven't deserted the ship and they aren't waiting around to make an honest living.

Apr. 19 2010 03:29 PM
larry the junkman

What Goldman Sachs did is worse than when the supermarket repackages old meat. It's worse because they knew their packages of bad mortgage could kill their investors. At least the supermarket hopes you only get a little sick

Apr. 19 2010 09:05 AM

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