Goldman Sachs, of course, is innocent until proven that it defrauded investors. It dismisses the suit as garbage.
Supporters like the Wall Street Journal cry that the SEC "usually notifies firms ahead of a lawsuit as a courtesy to give them a chance for a last-ditch settlement or to prepare for a public fallout." Paul Atkins, a former Republican SEC commissioner complains that the way the SEC launched the suit "certainly doesn't follow the spirit" or practice of the agency. To that, one shouts "alleluia."
The country needs an activist SEC to keep Wall Street sharks in their tanks. The suit wasn't exactly sprung on Goldman Sachs, which received an SEC subpoena requesting documents in August 2008. Geniuses of Goldman Sachs should have known something was up.
Applaud the return of the SEC to its "watchdog”" role of the distant past. The SEC served as a nothing more than a corporate lapdog during Bush II’s two terms in office. The country knows how that turned out. Enron, WorldCom and Countrywide Financial are corporate names that are remembered for their spectacular failures during eight years of the Bush White House.
Taking on the most powerful investment firm on Wall Street sends a robust signal that the SEC corporate cop is once again patrolling the enforcement beat. One can be sure other investment firms are trembling over Goldman Sachs’ takedown. The fear of getting caught in a federal sweep is a strong incentive to keep one’s nose clean. Investors benefit as they are less likely to be misled or bilked.
Let's hope the days of the SEC extending a "courtesy" to alleged lawbreakers is over. Kudos go to SEC Chairman Mary Shapiro. Happy hunting!
(Image: 1010wins)