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Home | News | Government | Goldman Charges Fuel Push for Stronger Wall Street Reform
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Goldman Charges Fuel Push for Stronger Wall Street Reform

Fraud allegations ""brought against Goldman Sachs Friday"": are still reverberating down Wall Street.


The Securities and Exchange Commission (SEC) has accused the company of duping investors by misleading them about the performance of collateralized securities backed by subprime mortgages that the firm bet on to fail â€" charges Goldman Sachs vehemently denies. Investors are said to have lost more than $1 billion.

Capital market analysts at ""Bernstein Research"": estimate that the suit could put Goldman Sachs on the hook for up to $700 million. The implications of the charges, though, stretch far beyond the walls of Sachs. With the federal government already gunning for big Wall Street firms as it pieces together financial reform legislation, the news has given Congress and the White House ammunition for tighter regulations.

The administration hasn't been subtle in placing the blame for the nation's economic meltdown squarely on the skyscraper shoulders of the nation's largest banks and financial firms â€" hyperbole that ""JPMorgan Chase's"": CEO Jamie Dimon has publicly described as ""the incessant broad-based vilification of the banking industry.""

[COLUMN_BREAK] It's safe to say that the public opinion of Wall Street and big banks has grown more and more negative and distrusting after massive government bailouts have led to a quick return to profits for some select companies while the financial crisis still weighs heavy on everyday Main Street.

Unsightly affairs such as the fraud charges brought against Goldman Sachs are making a stronger case for President Obama and his team to rein in ""the fat cats,"" as he's called them â€" to build new protections for families, small business owners, and investors against the business practices that he says pushed the economy to the brink.

Some observers say the Sachs ""incident"" is even working to unite Republicans and Democrats when it comes to drawing up rigid financial reform. The two factions in the Senate have butted heads for several weeks now over the specifics of the chamber's Wall Street reform bill, but Majority Leader Harry Reid announced Monday that he is moving the legislation to the top of the Senate calendar, with floor debate on the reform package getting underway this week.

Reid said in a press statement, ""Those who cared only to boost their own holdings and accounts must be held to account. To those who gamed the system, the game is over. Wall Street's ability to recklessly risk a family's future must be a thing of the past. Those who dealt in deception and benefited from the cover of darkness must be called out and brought out into the daylight.""

Lawmakers are working toward a bill that would create a new regulatory structure that ends ""too big to fail,"" increases market transparency, and provides stronger consumer protections for mortgages and other loans.

President Obama is planning to take the financial reform campaign on the road in the weeks ahead, even taking his rhetoric up Wall Street itself, according to White House officials.

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About Author: Carrie Bay

Carrie Bay
Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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