No slam dunk in the Goldman case
The NYT has a piece on the Goldman matter that says the case is not a slam dunk:
Rather than asserting that Goldman misrepresented a product it was selling, the most commonly used grounds for securities fraud, the Securities and Exchange Commission said in a civil suit filed Friday that the investment bank misled customers about how that product was created. It is the rough equivalent of asserting that an antiques dealer lied about the provenance, but not the quality, of an old table.
To a layperson, the case against Goldman may seem clear cut. After all, investors did not know some information about the product that they might have considered vital, and they lost $1 billion in the end. But the rules that govern these kinds of transactions are not so plain. Several experts on securities law said fraud cases like this one, which focuses on context rather than content, are generally more difficult to win, because it can be hard to persuade a jury that the missing information might have led buyers to walk away.
(Meanwhile, others are not amused by those taking Goldman’s side in the matter.) Arguably the most interesting aspect of this case is what it reveals about the integrated news/propaganda/lawmaking operation that is run out of the White House. We wondered for a brief moment whether it was a coincidence that we got an email from President Obama on his finance bill within hours of the Goldman suit, but only for a moment.
Final point: it seemed clear enough to us that if the GOP used a green-eyeshade approach to opposing Obama’s financial reform bill, they would look like they were carrying water for Wall Street, and that was a terrible strategy to employ. However, the way in which the administration has orchestrated its political/media program in favor of the bill is another matter. Aspects of the campaign, such as directing Google searches to the White House political machine seem more than a little contrived and overbearing. This bad political theater is getting to be a bit much and deserves the criticism it increasingly is getting.