Advancing a Free Society

Leave Goldman Alone

Monday, May 3, 2010

For the past two weeks, Goldman Sachs, the now-humbled Wall Street titan, has been battered by a potent troika of government assaults. The Securities and Exchange Commission has filed its civil fraud action. Senate hearings have had the riotous feel of a Soviet show trial. And the Manhattan office of the United States Department of Justice has recently announced its ongoing criminal investigation.

To its sorrow, Goldman has learned that its market clout is ever more vulnerable to these combined legal threats. Billions in wealth and legions of lobbyists and lawyers can't block these unilateral government initiatives. Yet they can easily fuel charges of the firm's persistent abuse of its powerful financial position. No wonder that Goldman stock has been downgraded by the Bank of America.

But now this pesky question: Just what does the public gain from three-prong federal inquisition?

Continue reading Richard Epstein at Forbes.com