If this doesn't wake people up to the need for financial reform, I have no idea what else possibly could.
Goldman Sachs is the most powerful investment bank in the United States and it is very likely that they will be convicted of fraud (something that people have been saying for a while now). Think about that. Our main investment bank is a fraud.
And this news comes after a week of many other well-reported stories on financial fraud. Last weekend, NPR's Planet Money and This American Life (along with ProPublica) exposed the dark inner-workings of a Chicago hedge fund. Then the NY Times on Tuesday reported that Lehman Brothers (whose bankruptcy - which was the largest ever - ignited the banking crisis and the current economic mess we are in) used a secret company to channel their enormous risks associated with their mortgage-backed securities.
Our financial system in this country is broken. Reform is desperately needed in order to keep our economy going in the long-term and to avoid another Great Depression or Big Bank Bailout. I have no idea why the "Tea-Partiers" do not grasp this idea.
I hope to write more on this issue in the coming week as it will be (finally) front-and-center in the media world.
In the meantime, I highly recommend watching this and reading this.
Booth – there are tons of companies that get hit with fraud that are not in the financial sector. The difference is that the media doesn’t spotlight them for the mainstream to feed on. Many of these companies are trading in the penny range or are not in a “hot” sector. I think that the best way to go after GS is to have the shareholders of the company bring action rather than some appointed sector of the government. This will guarantee that the non-governmental entity that does the investigation will at least be working on “some” form of a budget.
ReplyDeleteThanks for the comment, Mike.
ReplyDeleteYeah...but the big difference here is that this kind of fraud (and Goldman Sachs was not alone) essentially brought down the entire financial sector to its knees where we were faced with another Great Depression (much much worse than what we are currently experiencing) or a Big Gov't bailout. Fraud in any other sector that wasn't this intimately inter-connected to world's economic system would not have been such a big deal (think Enron).
I agree that there are some circumstances where the shareholders should bring action but this was a crime against all taxpayers that we are still reeling from in an enormous way. We should all be included on the plaintiff's side of this case, which is why the SEC is bringing it.
I agree with you in this case.
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