Now It Begins – Dems Push For Criminal Charges Against Goldman Sachs
The civil charges being brought against Goldman Sachs on the eve of the push for financial reform have been politicized from day one by the Obama administration and Democrats.
Civil charges can put pressure on a firm and industry, and in themselves can be destructive. Regardless of the SEC’s subjective motivation, objectively the Democrats’ use of the charges as an excuse to push through legislation seems to fit a pattern of bullying private industry.
Now the bullying is being raised to a whole new level, as Democrats in Congress are calling for a criminal investigation of Goldman Sachs:
A growing number of House Democrats are asking the Department of Justice to open a criminal investigation into Goldman Sachs.
Rep. Marcy Kaptur (D-Ohio) made the request Tuesday in a letter to Attorney General Eric Holder. Since then, almost 20 of her colleagues have signed on.
The Securities and Exchange Commission (SEC) has filed a fraud action against Goldman for allegedly promoting a package of investments that was designed to fail.
But the SEC can only pursue civil actions. Kaptur wants the Justice Department (DOJ) to consider criminal charges as well.
As destructive as civil charges can be, the bringing of criminal charges will put a company out of business quickly, as happened with the accounting firm Arthur Andersen which had the criminal charges thrown out by the U.S. Supreme Court, but only after the company was out of business.
As a regulated entity which relies upon licensure by various state and quasi-federal agencies, Goldman Sachs and other securities firms are particularly vulnerable.
The threat of criminal prosecution in this political theater should send a chill down the spines of executives at Goldman Sachs.
I’m not sure what Goldman Sachs did to earn the wrath of the Democrats, who were happy to take Goldman Sachs’ campaign contributions for years.
Perhaps the fact that Goldman Sachs has mounted a vigorous public relations campaign to dispute the charges has angered the Democrats in Congress, who are used to industry executives groveling at their feet.
Perhaps it’s just bad timing for Goldman Sachs.
Goldman Sachs may just be in the wrong place at the wrong time from the perspective of Democrats who are in a rush to pass legislation before the November elections.
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I'd ride easy on rounding up a posse and chasing after a criminal case against Goldman. Dems might be surprised just who they flush out of the sagebrush some afternoon. Not a good idea for anyone round about now. Not good for the faltering economy either.
Soon we will be like Soviet Russia with a stock exchange. When the dust settles, I think we'll feel like so many on both sides of the Atlantic in the early 1900s felt when they woke up one morning and discovered they had been left holding worthless Russian Imperial Bonds.
I doubt the DOJ will file criminal charges, unless they want to risk another bank run and financial panic like we experienced in 2008.
Most of the largest asset managers and hedge funds in the world use Goldman as one of their prime brokers. You don't want to see someone as large as PIMCO or Blackrock lose confidence in Goldman. The word of somebody that big deciding to transfer its accounts to another prime would spread instantly and create a liquidity crisis for Goldman in one trading day.
Goldman's stock price is signalling investors don't perceive the threat of a bank run is serious at this time. But Marcy Kaptur and the Democrats are playing with fire.
We are governed by idiots.
"I'm not sure what Goldman Sachs did to earn the wrath of the Democrats, who were happy to take Goldman Sachs' campaign contributions for years."
Let me make it simple. It's all just one big kabuki play. Goldman Sachs is the biggest supporter of the ginormous new bureaucracy that the Democrats are cramming down our throats with the willing participation of the knee-knocking Republicans. It will cement their privileged quasi-government status permanently. They got it done the same way the drug companies agreed to the health care boondoggle: cut a backroom deal, agree to be the bad guy in the class war, and come out a winner by locking in a favored position in a new economy.
I notice that none of the recipients of Goldman campaign contributions are giving them back. Why would they? They all played their roles to the hilt. The Republicans even wound up defending Goldman!
The ultimate irony is that Goldman comes out the big winner. They need never again fear being bumped as king of the mountain. They will be the defacto Government Sachs. Jobs galore for those who made it happen after they get voted out in November.
Well done all! What a display of courage!
Does that help?
Goldman will take care of themselves. They are the smartest and the wealthiest firm on the Street. If it wants to it will make mincemeat out of the fed. The Dems are just idiots and have yet to undertand that to get anything really done, you need to remove the head from the butt.
Rep Marcy Kaptur and every other Democrat official in Ohio are probably desperate to divert attention away from Ohio right now.
"Insider: Top Ohio homeland security officials falsify credentials, obtained fake diploma mill degrees"
"Despite the information I've already provided it is difficult to understate how absolutely corrupt and incompetent our department really is. Most of our leadership are [Gov.] Strickland flunkies and flacks who only have their high-paying jobs because of their political connections."
American Thinker also has the story.
I'm a bit more cynical.
SEC has brought a case which is extremely weak (judging only from news reports including today's), and GS will likely walk away victorious.
They'll spend $4 million or so defending it.
But Obama WILL have the PR–he picked on the Biggest of the Bigs.
It's a win for Obama, and a 'no-loss' for GS.
Can you say Kabuki?
Maybe it is kabuki, maybe not. And maybe GS and others will realize that Obama and the Dems are not honest politicians by the old definition–they don't stay bought.
Did Saul Alinsky ever write an updated book addressing what one should do when his tactics are failing miserably? Golly, weak civil case (I agree Dad29) and weaker criminal case – there's nothing here close to the scale of Enron, A. Andersen, Madoff, etc. What if Paulson bet wrong and the housing market kept rising? And Pasadenaphil I like your cynicism on this!
If the DOJ wants a good criminal case, I have a suggestion: how about going after the Billy-club wielding New Black Panthers who threatened elderly voters at polling places? Gee whiz, even the OLD Black Panthers think Holder should stop his dithering on that one.
I fear that Pasadenaphil is 100% correct.
I sincerely hope that Republicans publicly and clearly take the side of the big banks and Wall Street investment houses in this political charade. That should really endear them to their tea party base.
Sounds like Charles D is an Eeyore….?
The premise of this entire post is very disturbing. But, it fits well with Rule 13 of Alinsky's "Rules for Radicals." This is the current target; if a criminal case is brought, that will kill Goldman Sachs. However, just the threat of one can kill the business, so it is a win-win for Dems and Leftists all the way around. If what maggot, above, comments is true, then this is an orchestrated effort to take down the economy, on a massive scale: read "created crisis" for Obama gain. If what pasadenaPhil, above, says is true, then Goldman may be in on it and is looking at a long-term goal of emerging morphed into a new entity, bigger and stronger than before.
Don't underestimate these thugs. The Financial Regulation bill being pushed is just a small part of their plan. Question the timing. ALWAYS question the movites. Stinks – and it continues to grow.