GS sued for fraud at last

Reform may be finally getting somewhere. MSNBC's Dylan Ratigan walks us through the allegations and suit filed against Goldman Sachs yesterday by the SEC:

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Hopefully this will be a tipping point back in favour of sanity, truth and real reform. The implications have the makings of a renewed firestorm in the financial sector, and given that their continued fraud has been the wind beneath the wings of the stock market rally the past year, the implications should not be ignored.

“Given the push in Washington to pass a new financial-regulation bill, the SEC suit comes at a perfect time to help mute opposition.
If it results in stricter-than-otherwise legislation surrounding derivatives and trading activities, as proposed by former Federal Reserve Chairman Paul Volcker and the Obama administration, profits would suffer not just at Goldman.
First-quarter results from J.P. Morgan Chase showed, for example, that about 75% of the bank's net profit came from investment banking, which includes trading. Bank of America on Friday told a similar tale.
The SEC's Goldman case may also be just the first in a flood of actions against banks that sold exotic financial instruments based on mortgages. The growing threat of general litigation risk has already emerged in bank results….”

See: WSJ: Goldman's Grief may be shared