William Cohan: "Wall Street takes risks with our money, they count on getting bailed out, and they don't have any liability"

Complete transcript is inside.

Goldman Sachs is under fire again as a "big, bad, bank." This after a recent 600-plus-page bipartisan report released by Senators Carl Levin and Tom Coburn calling the banking mogul's ethical practices into question.

In a statement issued Thursday, Senate Subcommittee on Investigations Chairman Carl Levin says he wants the justice department to launch a formal investigation on perjury charges. He says Goldman quote - "clearly misled their clients" and, perhaps more damningly, Congress. 

Sachs, under investigation by the SEC, faced Congress in a series of hearings concerning its subprime mortgage loan practices.

WILLIAM COHAN:"...starting in December of 2006, they made a huge proprietary bet against the mortgage market. They bet that the mortgage market would fail, they turned out to be right. They didn't tell anybody. They didn't didn't tell their clients, they didn't tell regulators, they didn't warn anybody."

Essentially - the SEC accused Goldman of knowingly providing risky investments to clients.

SEN. CARL LEVIN (D-MICH): "... June 22 is the date of this email. 'Boy that Timberwolfe was one sh**** deal.' How much of that sh**** deal did you sell to your clients after June 22 2007?"
DANIEL SPARKS: "Mr. Chairman, I don't know the answer to that. But the price would have reflected levels that they wanted to invest in at the time."
SEN. CARL LEVIN (D-MICH): "Oh of course! But they don't know - you didn't tell them that you thought it was a sh**** deal!
DANIEL SPARKS: "I didn't say that."
SEN. CARL LEVIN (D-MICH): "No. But who did? Your people. Internally. You knew it was a sh**** deal, and that's what your email shows."

The case settled for $550 million.
Some still wonder, why bankers seem to be guilt-free despite their role in the housing market crash of 2008. In a New York Times article, a law professor says the difficulty with condemning banking institutions is proving their intent.

"This is not some evil conspiracy of two guys sitting in a room saying we should let people create crony capitalism and steal with impunity. But their policies have created an exceptional criminogenic environment. There were no criminal referrals from the regulators. No fraud working groups. No national task force. There has been no effective punishment of the elites here."

Although some say company policies weren't outright illegal, subcommittee Ranking Member Senator Tom Coburn says they are DEFINITELY unethical.

SEN. TOM COBURN (R-OK): "It shows without a doubt the lack of ethics in some of our financial institutions who embraced known conflicts of interest to accomplish wealth for themselves, not caring about the outcome for their customers."

But exactly what did the banking mogul do that was so unethical? Writer and professed banking expert William Cohan tells CNN, Sachs was keeping a huge secret from a lot of important players.

WILLIAM COHAN: "Even though there's 2300 pages of Dodd-Frank law now, the regulations haven't been written, nothing has changed. Until you change the incentive system on Wall Street, you're not gonna change people's behaviors. ... They are accountability free. They can take risks with our money, they can count on getting bailed out, and they don't have any personal liability."

So what will happen? What should happen? With continued resentment from the American public over the "bank bailouts", former International Monetary Fund chief economist Simon Johnson writes -- the government can't -- and won't let Goldman Sachs implode.

"Why wouldn't policymakers allow Goldman Sachs to fail? The simple answer is that it is too big. ... Intellectually speaking, the bankers have no clothes. Unfortunately, the officials in charge of making policy on this issue are still unwilling to think through the implications; capital requirements need to be much higher."

Senators Levin and Coburn say they plan to refer their report findings to the SEC and the Department of Justice. No formal charges have been made. 

Comments

[LiberatedCitizen]

Dead Suit Walking
If this isn't the Great Depression, it is the Great Humbling. Can manhood survive the lost decade?

http://www.newsweek.com/2011/04/17/dead-suit-walking.print.html

Second Amendment Rights Once Again at Risk

http://www.thenewamerican.com/usnews/constitution/7178-second-amendment-rights-once-again-at-risk

[Cheyenne]

"In a New York Times article, a law professor says the difficulty with condemning banking institutions is proving their intent."

That's what juries are for. Wall Street apologists like the perfesser here have been cowed into believing that a case must be air-tight before going to trial.

Not so. That's just the spin cycle. Feel free to ignore.

Let's get it on.