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"The U.S. Department of Justice, which is reviewing a Senate subcommittee report that alleged Goldman Sachs misled clients before the financial crisis, will avoid jeopardizing the fifth-largest U.S. bank by assets because it’s viewed as “too big to fail,” Hintz wrote in note to clients today. Photographer: Daniel Acker/Bloomberg
Sanford C. Bernstein & Co. Analyst Brad Hintz. Photographer: Jin Lee/Bloomberg
Goldman Sachs Group Inc. (GS) won’t face criminal prosecution related to sales of mortgage-linked securities because such a move could threaten the U.S. financial system, according to Brad Hintz, an analyst at Sanford C. Bernstein & Co.
The U.S. Department of Justice, which is reviewing a Senate subcommittee report that alleged Goldman Sachs misled clients before the financial crisis, will avoid jeopardizing the fifth- largest U.S. bank by assets because it’s viewed as “too big to fail,” Hintz wrote in note to clients today.
“If an alleged violation is identified during a Goldman investigation, we expect a reasoned response from the Justice Department,” Hintz wrote. “In a worst case environment, we would expect a ‘too big to fail’ bank such as Goldman to be offered a deferred-prosecution agreement, pay a significant fine and submit to a federal monitor in lieu of a criminal charge.” "
I guess along with too big to fail comes to big to punish. Quite upsetting to say the least. Is it really fair that some people/companies are "above the law"?
It really isn't fair that these people/companies that are mainly responsible for "misleading clients" (among other things) do not have to face the consequences of their actions. I believe they should be treated like other banks that failed... in other words the CEOs and other top executives should be replaced. The fact that they only have to pay a fine sends the message that they could potentially make the same mistakes, or that other "too big to fail" companies can get away with similar things with few consequences to their name.
ReplyDeleteTheyre aren't refraining from prosecuting because Goldman is too big to fail, that's just a front. There is no way "criminal" charges would ever hold up in court. In a criminal case the burden of proof is the on the prosecution, so the need to prove beyond a reasonable doubt that Goldman is guilty, which is REALLY hard (think 98%). If it were a "civil" case that would be much more of a possibility. But, either way, this has nothing to do with too big to fail...
ReplyDeleteThey* need to prove...
ReplyDelete