| Did Goldman mislead investors? |
 |
In the days after the SEC charged Goldman Sachs with fraud, the rest of Wall Street was left reeling. Anyone expecting hands to be rubbed in glee at the sight of mighty Goldman confronted with allegations that it misled investors would have been sorely disappointed.
"The SEC’s case just looks so weak," a banker at a rival firm exclaims to Euromoney. "It does look weak, doesn’t it?"
It’s easy to label the SEC’s surprise attack as political theatre designed to bounce the industry into acceptance of more intrusive regulation by picking on its smartest and most successful firm, and to distract attention from the inspector general’s stinging criticisms of the SEC’s own manifold failures.
It’s not hard, either, to see why so many are nervous. Rather than being a one-off set piece this case could be the first of many. Citigroup chief financial officer John Gerspach, speaking to analysts and investors on the bank’s first-quarter earnings call, broke off his discussion of the bank’s excellent results to say: "Citigroup is not involved in the matter the SEC announced on Friday.
