April 11, 2016
Government Settlement With Goldman Sachs Is No Real Punishment
Statement of Robert Weissman, President, Public Citizen
Note: Today, the U.S. Department of Justice, including the attorneys general of New York and Illinois, as well as the Federal Home Loan Banks of Chicago and Seattle and the National Credit Union Administration, reached agreement with the investment bank Goldman Sachs. The firm will pay approximately $5 billion to resolve state and federal investigations into its fraudulent mortgage-backed housing securities, which helped cause the 2008 financial crisis.
This is a $5 billion settlement to resolve wrongdoing that cost the national economy $20 trillion. Goldman Sachs has admitted it was a key link in the chain of wrongdoing that led to the 2008 crash and the Great Recession. But eight years after the crash, there are still no criminal prosecutions of either the Big Banks themselves or their executives.
The Department of Justice says this settlement will hold Goldman Sachs accountable. Unfortunately, that’s not so. Without criminal prosecution, there’s not even the illusion of accountability. This settlement, like others involving Goldman Sachs and the rest of the Wall Street perpetrators of the wrongdoing that led to the Great Recession, does virtually nothing to advance the objectives of deterrence, punishment or compensation for victims. The real message is, whether due to size, complexity or privileged access to politicians, Goldman Sachs and Wall Street remain above the law.