[Kosh]

And get some indiscriminate justice

April 20 (Bloomberg) -- The U.S. Securities and Exchange Commission split 3-2 along party lines to approve an enforcement case against Goldman Sachs Group Inc., according to two people with knowledge of the vote.

SEC Chairman Mary Schapiro sided with Democrats Luis Aguilar and Elisse Walter to approve the case filed on April 16, said the people, who declined to be identified because the vote wasn’t public. Republican commissioners Kathleen Casey and Troy Paredes voted against suing, the people said yesterday.

Schapiro, an independent appointed by Democratic President Barack Obama, cast the deciding vote in a high-profile case for the second time this year. In February, she sided with Democrats in a $150 million settlement with Bank of America Corp. tied to its takeover of Merrill Lynch & Co.

So, does this mean regulation enforcement is finally going to be a reality?

[Goober5000]

Probably not, as it's a civil suit rather than a criminal suit.

[Blue Lion]

Some have speculated that they're letting GS talk themselves into a criminal case. If they finally bring charges, I think a lot of what they've said here (if not all of it) is admissible.

This is all bloggers shooting their mouths off, so who knows if it's actually true.

[MP-Ryan]

Probably not, as it's a civil suit rather than a criminal suit.

Sometimes civil suits can be much more effective in levying meaningful penalties than criminal charges.  Unfortunate, but useful as well since the burden of proof is lower.

[Turambar]

So they'll have to pay some money.  They have tons of money.  Big frakking deal.

[Locutus of Borg]

Not as long as there are teabaggers

[BloodEagle]

Not as long as there are teabaggers

Wait. What?

[Klaustrophobia]

ok i have no idea what this is about.  what enforcement case?

[Liberator]

Interesting statistic on this case?

This is the first time(ever?) that the SEC has brought any kind of charges against a company that lost money.  Despite the bailout, Goldman-Sachs has lost billions over the last 2 years.  They're numbers are just starting to stabilize and the SEC wants to hit them again?  And it's not political?(If you believe that I have a bridge I wanna talk to you about...)

[karajorma]

My heart bleeds for them.

US bank Goldman Sachs has seen its profit for the first quarter of 2010 nearly double.

The bank reported net earnings of $3.46bn (£2.25bn) for the three months to March, up from $1.8bn a year ago.

Goldman also revealed that it paid its employees about $5.5bn in compensation, equivalent to 43% of its revenue.

[Goober5000]

If they committed a crime, it doesn't matter if they gained money or lost it.  Bernard Madoff wasn't charged until he started losing money.

[Liberator]

I'm just saying it sets a precedent for them filing suits against people who lose money in risky ventures.  Never bet more than you can afford to lose.

Also, a show of hands as to who wants or would be happy with a nanny state?

[General Battuta]

I'm just saying it sets a precedent for them filing suits against people who lose money in risky ventures.  Never bet more than you can afford to lose.

It sets a precedent for filing suits against people who commit crimes.

Also, a show of hands as to who wants or would be happy with a nanny state?

Is your definition of 'nanny state' a state that prosecutes criminals?

Are you okay with a nanny state? You drive on state roads in a car approved by government safety boards and so on. You seem to be fine with it.

[Liberator]

By nanny state, I mean one that tells you what to eat and where to live and eventually, if we're really lucky, who to marry and breed with.

And what they're setting the precedent is that they can and will file suit against anyone who had the gall to lose their investors money.  IE, if you start a business with help from some investors.  The business dies after 6 months and your investors are out their money.  With this lawsuit the SEC is saying that they could file suit against you for losing your investors money, probably even would if the amount were large enough or the investors important enough.

Once again, by and large The Market is the largest legal gambling operation on the planet.  As such, you should only risk what you can afford to lose.

[General Battuta]

By nanny state, I mean one that tells you what to eat and where to live and eventually, if we're really lucky, who to marry and breed with.

The state already tells us that. Gay rights activists are trying to stop it.

And what they're setting the precedent is that they can and will file suit against anyone who had the gall to lose their investors money.  IE, if you start a business with help from some investors.  The business dies after 6 months and your investors are out their money.  With this lawsuit the SEC is saying that they could file suit against you for losing your investors money, probably even would if the amount were large enough or the investors important enough.

No, that's not what they're saying. It has nothing to do with that AT ALL. You clearly did not even take the time to read the linked article before ejaculating a few gallons of your dogma all over the place.

I'll help you out:

The SEC accused Goldman Sachs, the most profitable firm in Wall Street history, of creating and selling collateralized debt obligations tied to subprime mortgages without disclosing that hedge fund Paulson & Co. helped pick the underlying securities.

The case is a response to an apparent crime. Improper business practices.

[karajorma]

It helps if you actually have the faintest clue about what you're talking about Liberator. Goldman Sachs asked a company to choose options for a portfolio of investment opportunities for their clients in full knowledge of the fact that said company stood to make money if the portfolio failed.

That's an enormous conflict of interests because it is in the interest of the sub-contractor to deliberately choose options that will tank. But Goldman Sachs didn't think it was important to tell their clients that this was the case and the clients lost over $1 Billion. So yeah, it's fraud.

[Ford Prefect]

It helps if you actually have the faintest clue about what you're talking about Liberator. Goldman Sachs asked a company to choose options for a portfolio of investment opportunities for their clients in full knowledge of the fact that said company stood to make money if the portfolio failed.

That's an enormous conflict of interests because it is in the interest of the sub-contractor to deliberately choose options that will tank. But Goldman Sachs didn't think it was important to tell their clients that this was the case and the clients lost over $1 Billion. So yeah, it's fraud.

I think the most disturbing part is that it's only illegal because they didn't disclose it. If my understanding is correct, all they had to do was embed that information somewhere in a tome of legalese, and it would have been perfectly legitimate.

[Kosh]

I'm just saying it sets a precedent for them filing suits against people who lose money in risky ventures.  Never bet more than you can afford to lose.

Also, a show of hands as to who wants or would be happy with a nanny state?

So, you're saying fraud is ok?

[Liberator]

No I'm not saying fraud is OK.

I'm saying you indict the dumbasses who committed the fraud, not the whole company.  If it's the entire board of directors or whoever, indict the ones that committed the crime, not the organization they work for.  Unless. of course, your goal is to smear the company/industry in a bid to accomplish some other goal, which I am still not sold on this not coming down from somewhere on or around Capitol Hill.

And, yes, I know the SEC is an "independent" entity from the administration.

[bobbtmann]

I wouldn't say those dumbasses were too dumb, since they made a lot of money. It seems to me  this drive to get money no matter what it costs other people is very apparent in the free market economies.

The people who did this crime are simply doing what they view as socially acceptable. Selfishness is considered a higher good, certainly in the philosophies of Ayn Rand and free market advocates. Don't deny human nature, they say. Extol its virtues and create a culture of selfishness. So how can we really be upset when we hear about scams and corruption? They're merely acting according the ultimate good of selfishness.

If you want to deal with the corruption and scams, reign in the free market and pass legistlation to limit what companies can get away with. This includes dumping waste or union busting, since in the end its average Joe's who suffer for it.