This is very, very good news:
Goldman Sachs, which emerged relatively unscathed
from the financial
crisis, was accused of securities fraud in a civil
suit filed Friday by the Securities and Exchange Commission,
which claims the bank created and sold a mortgage investment that was
secretly devised to fail.
The move marks the first time that regulators have taken action against a
Wall Street deal that helped investors capitalize on the collapse of
the housing market. Goldman itself profited by betting against the very
mortgage investments that it sold to its customers.
The suit also named Fabrice Tourre, a vice president at Goldman who
helped create and sell the investment.
a statement, Goldman called the S.E.C. accusations “completely
unfounded in law and fact” and said the firm would “vigorously contest
them and defend the firm and its reputation.”
The catalog of crimes committed by Goldman Sachs are well documented (see Matt Taibbi’s excellent run down of its shady dealings) so a court case should be highly entertaining and informative. My guess is that the government is so intertwined with the megalithic bank that it will ultimately escape unharmed, but Sach’s reputation will take such a hit that it will never be as powerful as it once was.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.