Senator Levin: Goldman Sachs Got Off Easy

by Stuart Shapiro

Last week DOJ announced that it would not be pursuing charges against Goldman Sachs for selling mortgage backed securities that it was privately betting would go down in value.  DOJ argued that it could not find enough evidence to prosecute Goldman.  Senator Carl Levin is not happy.

A day after the department announced its decision, Democratic Senator Carl Levin reiterated in a written statement the criticisms he lodged against Goldman beginning more than two years ago. He called the firm’s actions “deceptive and immoral . . .It misled investors by claiming its interests in those securities were ‘aligned’ with theirs while at the same time it was betting heavily against those same securities, and therefore against its own clients, to its own substantial profit.”

I don’t have the legal mind to evaluate whether DOJ could have made a case here.  But Levin is right on when we says that bad behavior took place and it frustrates all of us when we see the most powerful and wealthiest get away with it.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.