Weekly Wrap: Goldman Sachs escapes criminal charges
Felix Salmon of Reuters and Leigh Gallagher from Fortune Magazine wrap up this week’s business stories.
On the implications of the Department of Justice choosing not to file charges against Goldman Sachs:
Felix Salmon: This was a relatively narrow case of the best of times. They might conceivably have found enough evidence to bring criminal charges on one mortgage-backed security deal that was put together by one bank, but you can’t blame the entire financial crisis on one mortgage-backed security deal from one bank. I think that what we’ve discovered here is that criminal charges are incredibly hard to bring, and you can’t just say, ‘Oh well, we’ve managed to find some wrongdoing at one bank, therefore it was all Goldman’s fault.’
Leigh Gallagher: I don’t think the public should just move on. I think ideally, there would be more effort made to find the wrongdoing that Felix mentioned, the stuff that really was illegal or broke the regulations — because it’s out there. And clearly the public is hungering for it. There is definitely, I think there’s been a lack of hard enough prosecution, I really do.
Salmon: The other thing is, there is huge amount of blame to go around and it’s really hard to pin all on one criminal act. We all were part of that big bubble. The borrowers were part of it, the underwriters were part of it, the investors were part of it, the ratings agencies were part of it, the politicians were part of it — the regulators themselves were part of it, and that may be part of the reasons they’re not being too zealous about bringing the charges, because they know all of the fault is on themselves.
For more analysis, listen to the full audio.
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