Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein. (Photographer: Scott Eells/Bloomberg)
Aug 10, 2012
In a case that exemplifies the degree to which Wall Street's largest financial firms have been shielded from meaningful prosecution for their role in the financial crisis of 2008, the Justice Department late on Thursday announced that no charges would be brought against Goldman Sachs for its role in fueling the sub-prime mortgage debacle.
The Security and Exchange Commission (SEC) also concluded its investigation to the firm without bringing charges.
Goldman Sachs -- which Rolling Stone's Matt Taibbi once famously described as 'a giant vampire squid wrapped around the face of humanity' -- will not face prosecution for selling bundled 'mortgage-backed securities' to clients while simultaneously describing them as "crap" in internal communications.
As Bloomberg recounts, "The Senate's Permanent Subcommittee on Investigations concluded in April 2011 that Goldman Sachs had peddled mortgage- related securities to its clients while failing to disclose that the firm had bet that those instruments would lose value. The investigation pinned much of the blame for the credit crisis on Wall Street banks that earned billions of dollars by enticing clients to buy the risky bonds."
"Without... accountability, the unending parade of megabanks scandals will inevitably continue." -- Neil Barofsky
The proliferation of securitized sub-prime mortgages -- and the manner in which such products were pushed on unknowing consumers -- are widely credited with triggering the collapse of the housing market and sending the financial credit markets into a tailspin in the summer and fall of 2008.
"The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the Justice Department said in a statement late on Thursday.
Neil Barofsky, a former watchdog for the U.S. government's financial system bailout in 2008, toldReuters that the announcement was a stark reminder that no individual or institution had been held meaningfully accountable for their role in the financial crisis.
"Without such accountability, the unending parade of megabanks scandals will inevitably continue," said Barofsky, who has been an outspoken critic of the government's response to the financial crisis.
In a brief statement emailed to Reuters, a Goldman Sachs spokesman said: "We are pleased that this matter is behind us."
# # #
Join Us: News for people demanding a better world
Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place. We're hundreds of thousands strong, but every single supporter makes the difference. Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. Join with us today! |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
In a case that exemplifies the degree to which Wall Street's largest financial firms have been shielded from meaningful prosecution for their role in the financial crisis of 2008, the Justice Department late on Thursday announced that no charges would be brought against Goldman Sachs for its role in fueling the sub-prime mortgage debacle.
The Security and Exchange Commission (SEC) also concluded its investigation to the firm without bringing charges.
Goldman Sachs -- which Rolling Stone's Matt Taibbi once famously described as 'a giant vampire squid wrapped around the face of humanity' -- will not face prosecution for selling bundled 'mortgage-backed securities' to clients while simultaneously describing them as "crap" in internal communications.
As Bloomberg recounts, "The Senate's Permanent Subcommittee on Investigations concluded in April 2011 that Goldman Sachs had peddled mortgage- related securities to its clients while failing to disclose that the firm had bet that those instruments would lose value. The investigation pinned much of the blame for the credit crisis on Wall Street banks that earned billions of dollars by enticing clients to buy the risky bonds."
"Without... accountability, the unending parade of megabanks scandals will inevitably continue." -- Neil Barofsky
The proliferation of securitized sub-prime mortgages -- and the manner in which such products were pushed on unknowing consumers -- are widely credited with triggering the collapse of the housing market and sending the financial credit markets into a tailspin in the summer and fall of 2008.
"The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the Justice Department said in a statement late on Thursday.
Neil Barofsky, a former watchdog for the U.S. government's financial system bailout in 2008, toldReuters that the announcement was a stark reminder that no individual or institution had been held meaningfully accountable for their role in the financial crisis.
"Without such accountability, the unending parade of megabanks scandals will inevitably continue," said Barofsky, who has been an outspoken critic of the government's response to the financial crisis.
In a brief statement emailed to Reuters, a Goldman Sachs spokesman said: "We are pleased that this matter is behind us."
# # #
In a case that exemplifies the degree to which Wall Street's largest financial firms have been shielded from meaningful prosecution for their role in the financial crisis of 2008, the Justice Department late on Thursday announced that no charges would be brought against Goldman Sachs for its role in fueling the sub-prime mortgage debacle.
The Security and Exchange Commission (SEC) also concluded its investigation to the firm without bringing charges.
Goldman Sachs -- which Rolling Stone's Matt Taibbi once famously described as 'a giant vampire squid wrapped around the face of humanity' -- will not face prosecution for selling bundled 'mortgage-backed securities' to clients while simultaneously describing them as "crap" in internal communications.
As Bloomberg recounts, "The Senate's Permanent Subcommittee on Investigations concluded in April 2011 that Goldman Sachs had peddled mortgage- related securities to its clients while failing to disclose that the firm had bet that those instruments would lose value. The investigation pinned much of the blame for the credit crisis on Wall Street banks that earned billions of dollars by enticing clients to buy the risky bonds."
"Without... accountability, the unending parade of megabanks scandals will inevitably continue." -- Neil Barofsky
The proliferation of securitized sub-prime mortgages -- and the manner in which such products were pushed on unknowing consumers -- are widely credited with triggering the collapse of the housing market and sending the financial credit markets into a tailspin in the summer and fall of 2008.
"The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the Justice Department said in a statement late on Thursday.
Neil Barofsky, a former watchdog for the U.S. government's financial system bailout in 2008, toldReuters that the announcement was a stark reminder that no individual or institution had been held meaningfully accountable for their role in the financial crisis.
"Without such accountability, the unending parade of megabanks scandals will inevitably continue," said Barofsky, who has been an outspoken critic of the government's response to the financial crisis.
In a brief statement emailed to Reuters, a Goldman Sachs spokesman said: "We are pleased that this matter is behind us."
# # #
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.