Fierce Finance reports that Wall Street has been riveted by the possibility that the Department of Justice will file criminal charges against Goldman Sachs and/or individual executives, such as CEO Lloyd Blankfein. It's a possibility that has kicked up furiously after being dormant for many months.
The speculation has been heated, but how likely is this really? The New York Times notes, "The greatest challenge to pursuing any prosecution of Goldman and its officers related to its mortgage operation would be proving intent to defraud, if the case involves mortgage securities sales to clients, or intent to mislead Congress, if a perjury or false statement case is under consideration."
The successful prosecution of Raj Rajaratnam suggests the difficulty prosecutors would have against Goldman Sachs. At this point, the big question for prosecutors is less about what they know to be true and more about what they can prove. And "to make a criminal case out of the mortgage activities, prosecutors would need at least one credible witness from inside the firm to point the finger at Goldman and its executives to show the company's culpability, proving that it was more than just a sharp operator."
Investigators don't have that one credible witness from the inside, and it's doubtful it will find one. Omerta will likely hold. Unfortunately, investigators do not have wiretap evidence--something that would prove superior to a bunch of suggestive but not definitive emails.
For more:
http://www.fiercefinance.com/story/why-government-cant-win-against-goldman-sachs/2011-05-25?utm_medium=nl&utm_source=internal
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