Financial Regulatory Forum

Goldman Sachs’ soul search – sincere or strategy?

   By Steve Eder and Rachelle Younglai
   NEW YORK/WASHINGTON, April 28 (Reuters) – Contrary to popular belief, Goldman Sachs Group Inc <GS.N> has a soul – and it is even spending time searching it.
   In the closing hours of Goldman’s marathon showdown with a Senate panel in Washington on Tuesday, Chief Executive Lloyd Blankfein shared that the Wall Street giant is in the midst of an internal cleansing in which a top executive is leading a business practices committee and “going over everything.” (more…)

What are the odds on a three-legged horse?

Senators quizzing Goldman Sachs executives yesterday seemed at least as concerned about the wider ethical issues of investment banking as they did about the actual charges that the SEC has laid against Goldman, writes John Manley. (more…)

Goldman Sachs: Shareholder Revolt Spreads Where the SEC Has Yet to Tread

Where the SEC goes, plaintiffs’ lawyers are sure to follow. But in the case of Goldman Sachs, they’ve charged ahead straight into the C-suite, alleging far broader levels of misdeed than the SEC’s limited charges surrounding an individual transaction, writes Erik Krusch of Thomson Reuters Westlaw Business Currents. (Click here for further details.)  (more…)

Goldman Sachs making lemonade

Goldman Sachs has “a lot to answer for,” Sen. Carl Levin said ahead of a hearing that will focus on the role investment banks played in the financial crisis. Lawmakers have been pressing for more information ever since the SEC accused Goldman of fraud for its role in underwriting a controversial subprime security. Thomson Reuters’ WG&L Accounting & Compliance Alert looks at the issues.  Click here for more details.   (more…)

Fabulous lessons from Fab

By John Manley

Three years ago, Goldman Sachs bond trader Fabrice Tourre, emailed his girlfriend Marine. Amid the amour and tendresse, “Fabulous Fab” expressed his misgivings about his job: he was conflicted about selling financial instruments that he thought were destined to fail.

Though Fab tried to rationalise his role as a small cog helping the huge engine of the capital markets operate more efficiently, he didn’t appear entirely convinced that this cleared him of any ethical responsibility.

“Anyway, not feeling too guilty about this,” Fab wrote to Marine in January 2007. “The real purpose of my job is to make capital markets more efficient and ultimately provide the U.S. consumer with more efficient ways to leverage and finance himself, so there is a humble, noble and ethical reason for my job ;) amazing how good I am in convincing myself !!!”

Will Goldman Complaint Repair the Damage from Madoff Fiasco?

Some former government prosecutors are cheering the SEC’s case against Goldman Sachs. Some even called it a watershed event that might rehabilitate the SEC’s image, which has been tarnished in the fallout from the financial crisis and the failure to catch financial fraudsters like Bernard Madoff. Now all the SEC has to do is win its trial against Goldman, which is vowing to fight the charges, reports WG&L, from Thomson Reuters tax and accounting specialists. (more…)

Paulson-linked IPO delayed

WLB-logoIn the aftermath of the Goldman Sachs fraud charges, Propel Capital said it was delaying the Canadian IPO of its Propel Multi-Strategy Fund – until recently called the Propel Paulson Diversified Fund. Propel says it’s just a delay, but there is no indication when the offering might be resurrected.  Westlaw Business Currents, a Thomson Reuters product, looks at the issues. 

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from The Great Debate:

SEC’s case against Goldman highlights need for Wall Street reform

-- Ed Mierzwinski is the longtime consumer program director of U.S. PIRG, the federation of state Public Interest Research Groups. U.S. PIRG is a founding member of Americans for Financial Reform, an unprecedented coalition of over 250 labor, senior, civil rights, community and consumer organizations. --

Over 18 months ago, U.S. taxpayers bailed out the reckless Wall Street banks. Yet, despite widespread and overwhelmingly public support for Wall Street reform and dramatic House action in December, efforts to move a Wall Street bill through the Senate have been stalled for months by a phalanx of powerful Wall Street lobbyists. While we cannot count them out, because they’ve increased their lobby and campaign spending as we move toward the endgame, Banking Committee Chairman Chris Dodd’s (D-CT) coup in moving a strong bill closer to floor action gave us some wind in our sails.

Then, several events last week put an even bigger whirlwind behind our reform efforts.

Goldman CEO attacks SEC fraud charges – FT

    NEW YORK, April 21 (Reuters) – Goldman Sachs Group Inc <GS.N> Chief Executive Lloyd Blankfein attacked U.S. Securities and Exchange Commission fraud charges against the bank in phone calls to clients, the Financial Times said on Wednesday. (more…)

from The Great Debate:

Taxing spoils of the financial sector

If you want less of something, tax it.

That truism is often used as an argument against a tax on profits, or health benefits, or employment, but in the case of the rents extracted from the economy by the financial services industry here's hoping it proves more of a promise than a threat.

The International Monetary Fund has put forward two new taxes on banks to pay the costs of future rescues, one of which is a fairly conventional "Financial Stability Contribution," with an initial flat levy on all banks, to be refined later into something with more precise institutional and systemic risk adjustments.

More interestingly, the IMF is also proposing a "Financial Activities Tax," (FAT) a tax on bank pay and profits which, if correctly designed, could serve as a tax on rents -- the unwarranted spoils -- of the financial sector.

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