The Blog Of The Securities Industry Professional Association

Goldman takes one for the Team

Don Corleone could not have planned it any better

In the Godfather, young Michael Corleone gets revenge for his father by shooting down a gangster and a corrupt cop in the middle of a restaurant. Knowing full well that killing a cop will cause a public outrage, the family arranges for Michael to disappear to Sicily for a few years and allows some of the lower level thugs in the neighborhood to be arrested and exposed by the police. After a series of arrests and a couple years pass, young Michael comes home a man and takes over the family operations as if nothing happened. As I read the SEC press release on Friday charging Goldman with fraud I couldn’t help but laugh and wonder if they contacted Mario Puzo and asked for advice on how to get the swirling controversy around them to subside. The fraud charges are comical at best due to the fact that one person from Goldman was named in the SEC indictment. A single, junior Vice President named Fabrice Tourre was named in the SEC complaint. I could swear Fabrice was one of Michael Corleone’s body guards while he was in Sicily..Seriously, where did they find this guy? A quick check of Goldman on broker check reveals he is not listed as a manager in any capacity with the firm. Where is the Compliance officer? Chief Legal Counsel? The President ? CEO? They had no idea what “Fabio” was doing?

This is once again why ‘regulatory reform’ is a joke and will accomplish nothing. The rules and regulations are already in place, yet nobody ever enforces them against the largest firm. Are we to believe A single Junior Vice president named “ Fabrice” was allowed to do these huge transactions and commit all these crimes without oversight and permission from the higher ups? A 31 year old kid was allowed to make hundred million dollar decisions with Goldman’s money without approval? What is even more interesting is the fact that of all the frauds committed by Goldman and its cartel, this is the one the SEC chooses to prosecute? As of today Goldman has over 170 formal regulatory actions filed against it. This does not include their other entities which are also marked up to the tune of 118 hits. The boys at Goldman have taken approximately 300 regulatory hits, yet to this date the top executives have never been named individually, instead some guy named “Fabio” is the fall guy who will be expelled from the industry as a sacrificial offering for public relations sake. The regulators in this country already have enough rules and regulations in place to get the bad guys however they are too afraid to go after them. For instance an independent report by the inspector general of the SEC reports that as early as 1997 the SEC had knowledge of Sanford’s ponzi scheme yet they did nothing. A Sheriff has a lot of power and resources to keep the law but if he’s sitting in Duncan Donuts all the time the powers are useless. That is precisely what has occurred here. This SEC action is nothing more then an agreed upon public relations event. The SEC gets to show the public that they are ‘going to get tough” and Goldman sends a 31 year old throw away thug to the electric chair in order to give the public a pound of meat. The Corleone family could not have planned it any better.

By John Busacca

SIPA Founder

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