Goldman Sachs Caves & Settles

Back in late April, in this post, I contended that Goldman Sachs was probably eager for the Abacus case to come to trial.

Thus, Friday's announcement of a half-billion dollar settlement with the SEC by the firm was unexpected news, at least to me.

The Wall Street Journal's lead staff editorial this past weekend pretty much summed up the situation. The SEC case opened on or near the day that the FINREG mess began rolling in Congress. Its settlement, with no admission of guilt by Goldman, on the day of the FINREG passage appropriately signaled the case as the political witch hunt it was.

With FINREG passed, and Goldman having been muzzled during the process, a trial was no longer actually desirable for either party.

The really bad news is how this case illustrates the nature of federal government thuggery now commonly practiced on private sector businesses.

And the mute acceptance of said thuggery by said business leaders.

I would have had a lot more respect for Blankfein, et al, had they stood up and demanded vindication and acquittal in court. Instead, they meekly agreed to a settlement, which signals that they didn't really believe they could or would win.

Others may argue that they got off cheaply. That a court case and potential civil liabilities were not in the shareholders' interests.

I'm not so sure. How can business operate for the long term in an environment in which government is so openly corrupt and coercive? If the SEC could get away with this case, who's to say who and how large will be the next coerced target of the administration?

This isn't justice. It's a private business succumbing to coercion by the government, rather than exposing it from the rooftops for all to see and understand.