Recent reports in the Wall Street Journal www.wsj.com indicate that Goldman Sachs's management is showing interest in a settlement of the civil fraud charges filed by the SEC.
CFO David Viniar and Vice Chairman J. Michael Evans are both reported as saying that the company would be happy to settle. Viniar is further quoted as saying: "the company does not want to antagonize the SEC."
Only two conclusions can be reached from these reports. The first is that Goldman's senior executives were lying when they denied any wrongdoing. Given that both ethics and honor appear to be endangered species in the Wall Street jungle, such actions are, while more than regrettable, merely part of the background. Were the Senate Finance Committee to ask the Department of Justice to bring charges of perjury against Goldman's executives, with respect to their testimony - under oath - before the committee, the world would be a slightly better place.
The second conclusion, based on the quote about 'not wanting to antagonize the SEC' is that the government has successfully blackmailed an innocent company - although, admittedly, it can hardly be described as either honorable or sympathetic - and will, eventually, extract large sums of shareholder funds in a so-called settlement. Your correspondent uses the qualifier 'so-called' because the payment would be better described as ransom.
If the latter situation is the case, then Goldman is facing yet another example of excessive and unrestrained government power. That the power is being directed at one of the current villains does not make its use right.
Wasn't there a successful revolution in America, about two hundred and twenty five years ago, that was provoked by the abuses of power committed by the British King and his Ministers?
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