Things are heating up on the suspicious trading allegations front involving Goldman Sachs as federal prosecutors are said to be in the early stages of bringing criminal charges against the Wall Street titan.[1]
The Securities and Exchange Commission referred its investigation to prosecutors for the Southern District of New York, which has opened its own inquiry.
The SEC's investigation is a civil suit (brought last week), "which accused Goldman of defrauding investors involved a complex mortgage deal known as Abacus 2007 Ac1".[2]
A federal case against Goldman "would face a higher bar"where prosecutors must prove their case beyond a reasonable doubt."[3]
So to use some of today's jargon, a criminal case against Goldman should not be considered a "slam dunk" as exemplified by a case brought against two Bear Stearns hedge fund managers (brought last year) that failed to get a conviction. Simply, "prosecutors were unable to prove to a jury any criminal wrong doing by the Bear Stearns employees."[4]
So in our zealousness to cut "King Goldman" down to size and face the consequences of its "seemingly" criminal trading practices the bar in a criminal case has to prove malfeasance beyond a reasonable doubt.
We all know the story of a Supreme Court Justice saying about pornography, "You know it when you see it." But just as the "Supremes" have shown an inability to criminalize it, the same could be said of "proving beyond a reasonable doubt" what the Goldman crowd (or any of the other financial firms' high flying traders) were doing was criminal.
And what about the political hypocrisy of many of our current lawmakers (who are now in "high dungeon" calling for criminal investigations of Goldman) who abetted them by enacting the laws and regulations and the lack of oversight that unmoored Wall Street to engage in the practices that brought the financial meltdown and the subsequent "great recession."
So our politicos are just as complicit as those they now accuse but where is the investigation into their "criminal" conduct? But here's the rub; they made sure it was all legal. The whole system has been devised so nobody is responsible for any wrongdoing when all is said and done and "things" come crashing down on the rest of us, "the great unwashed."
Truth be told, the lack of responsibility and accountability in this whole financial debacle is at the center of peoples frustration, exasperation and cynicism that the whole system is corrupt, works against them and serves only to the benefit of the chosen few.
When it comes to the cancer patient and his (her) surviving its ravages, it is all important for the surgeon to remove it all. Missing some of the cancer can be fatal.
As to our "financial cancer" can we trust our current crop of the people's representatives "to remove all the cancer" in our financial system? If they're unable or not up to the task, lets not pretend there's a mystery as to why.
