Friday, April 23, 2010

Goldman Sachs -- a weak case?

Megan McArdle thinks so.  The vote on the SEC to bring charges broke down by party lines.  The Democrats are painting it as Republican obstructionism, as usual.  But she thinks another interpretation -- that the charges the Democrats want to bring are so weak they won't stand up in court.

One piece of evidence in favor of this: none of the people I know who are familiar with securities law think that the government has a strong case; the opinions range from "seriously pushing the envelope" to "give me a break."  And no, these aren't my fat cat friends on Wall Street; they're folks like Economics of Contempt, who has had more than a few harsh words about Republican efforts to stall reform.  It is, of course, entirely possible that I'm missing a lot of top-notch securities lawyers who think the government has a slam dunk.  But there's a plausible argument that the government simply demanded too high a settlement, either because it wanted a political coup, or because it just miscalculated. 

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