In yet another confirmation that Goldman's multi-million dollar push to advertise its humanitarian image on various websites has been a colossal failure, the WSJ has just broken news that the firm will shortly be the proud recipient of yet another barrage of legal inquiry in the form of subpoenas relating to its mortgage-related business, only this time not from the SEC but from criminal prosecutors.
This stems from Carl Levin's massive 639 page report which referred the firm to the justice department (and whose findings were summarized best by Matt Taibbi), an escalation which could rekindle not only a civil case against the squid, but also potentially force the new District Attorney to finally lob a couple of criminal indictments here and there, thus guaranteeing that GS stock is about to be pulverized (and cementing those plans to finally MBO the company, as the Fed's balance sheet has largely served its purpose).
The WSJ clarifies: "Subpoenas don't necessarily mean criminal charges against Goldman or individuals at the firm are inevitable or even likely. The company turned over hundreds of millions of pages of documents to the Federal Crisis Inquiry Commission, a 10-member panel that examined the causes of the financial crisis. Goldman also gave tens of millions of documents to the Senate Permanent Subcommittee on Investigations." Yeah, but...
"Any step in the direction of criminal charges would be bad news for Goldman's stock price," said Jeff Harte, an analyst at Sandler O'Neill + Partners LP." And now that Rolling Stone has peeled off the scab once more and made it all too clear that the villain is and has always been GS, Lloyd may find himself on the wrong side of the Q&A session all over again.
So, it looks like that despite my fears that the Justice Department would quietly forget to follow up on the recommendations of the Levin report as it was referred to them (and they are under no requirement to do so) that the first steps are being taken to put together a criminal case. I'm more than pleased by this.
On the other hand, this is the perfect opportunity to let Goldman Sachs walk with a slap on the wrist and billions of our tax dollars, so until there's guilty verdicts rendered on a bunch of people with "Former Goldman Sachs Chief-Level Officer" on their resumes, I'm not holding my breath.
We'll see. My gut tells me it's going through the motions, and nothing will come of this.
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