Sunday, April 18, 2010
Goldman Cracks
Given the tremendous water pressure involved, even a small crack in a huge dam can lead to catastrophic failure.
Similarly, even a small breach in a seemingly invincible army's defenses can lead to defeat.
The SEC's fraud action against Goldman Sachs is really small potatoes. It alleges only civil - not criminal - fraud.
And it is against only one small player, not against his bosses or top management.
(And Goldman has done a lot worse.)
But Goldman has suffered a crack in its veneer of respectability.
More importantly, the SEC action may represent a crack in the company's armor.
Before the SEC announced the charges, Goldman seemed unstoppable. It seemed like even countless tons of water pressure or scores of invading armies could not touch Goldman.
Now, there is a crack ...
Even if the timing of the SEC's announcement was wholly political (some commentators have called it bread and circuses or kabuki theater), and even if (as some writers have alleged) Goldman CEO Lloyd Blankfein himself approved the action as a way to diffuse pressure for bigger, criminal prosecutions against bigger players, tons of public pressure and hordes of lawyers are probably on their way.
Or perhaps Goldman is like the warlord hated - but feared - by all. If there is ever a crack in the warlord's veneer of invincibility, the locals might realize that he is only human after all ... and decide they can - together as a group - take him on.
5 comments:
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Could this civil suit for fraud against Goldman Sachs be the modern equivalent of going after Al Capone for tax evasion?
ReplyDeletePerhaps the timing has another meaning. Today is the 68th anniversary of another small but profound attack on a seemingly invincible empire: the Doolittle Raid.
ReplyDeleteI think this is a rupture in the dike rather than just a crack.
ReplyDeleteGermany, UK, RBS, Connecticut and others are already piling on. Many more to come, I'm sure.
And really, they have no friends.
Reminds me of Leonidas exposing Xerxes in 300. I'll be waiting for my internets.
ReplyDeletehttp://www.youtube.com/watch?v=Wux7cNTq0ZY
My understanding is a lot of people are questioning why this is a civil and not criminal case. But I read that with a civil case the accused cannot use the Fifth Amendment, which certainly is not in GS' favor.
ReplyDeleteMy concern is that this suit has no teeth and that whatever revelations come out of this will only cause even more anger on the part of the citizens but nothing will really change.