sri-advisor.com
where checking accounts rebuild communities
Back to homepageInstitutional ReportsSRI Financial Professionals DirectoryToolsNewsSRI Performance and TrendsAbout Us   
News


August 12, 2012
Goldman Sachs Escapes Criminal Charges
    by Robert Kropp

Despite evidence of conflicts of interest detailed in last year's report by the Senate's Permanent Subcommittee on Investigations, the Justice Department announces that it will not bring a criminal prosecution against the bank.


In May, 2011, the US Senate's Permanent Subcommittee on Investigations published its report on the causes of the financial crisis. Entitled Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the report was notable for the severity of its criticism of the activities of Goldman Sachs, going as far as advising regulators to "review the…activities described in this Report to identify any violations of law."

Goldman Sachs, the Senate investigators found, designed, marketed, and sold collateralized debt obligations (CDOs) "in ways that created conflicts of interest with the firm's clients and at times led to the bank's profiting from the same products that caused substantial losses for its clients."

In a press briefing following the Subcommittee's publication of the report, Senator Carl Levin, the Chairman of the Subcommittee, stated, "Our investigation found a financial snake pit rife with greed, conflicts of interest, and wrongdoing. Rampant conflicts of interest are the threads that run through every chapter of this sordid story."

Also following the report's publication, Matt Taibbi wrote in Rolling Stone, "The evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial."

More than a year later, the US Justice Department has delivered its verdict: there will be no criminal charges brought against the bank. In a statement issued on Thursday, authorities stated, "Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution."

Also on Thursday, "Goldman Sachs announced early Thursday that the Securities and Exchange Commission had ended an investigation into a $1.3 billion subprime mortgage deal, taking no action," Th e New York Times reported. "The move was an about-face for the commission, which notified the bank in February that it planned to pursue a civil action."

On Friday, Levin issued a statement addressing the Justice Department's decision.

"Whether the decision by the Department of Justice is the product of weak laws or weak enforcement, Goldman Sachs' actions were deceptive and immoral," Levin stated.

"Yesterday's announcement makes it even more important that regulators implement Dodd-Frank with rules that do not water down it down, and that they enforce those rules with vigor," Levin continued. "The integrity of our financial markets and the strength of our economy demand that we make sure that actions such as Goldman Sachs' and other recently discovered misdeeds by financial institutions are ended."

Praising Levin for "a public service well done," Bloomberg columnist Jonathan Weil wrote on Thursday, "Fortunately, the details of Goldman's appalling behavior and role in the financial crisis will live on forever in the public record."

 

 
Home
| Reports | SRI Financial Professionals Directory | Tools | News | SRI Performance and Trends | About Us | Contact
© SRI World Group, Inc. - All rights reserved
Terms of use - Privacy Policy - OneReportTM Network