For Immediate Release
April 16, 2010
Washington, DC – Americans for Financial Reform issued the following statement regarding the S.E.C. suit accusing Goldman Sachs of fraud on mortgage deals.
Heather Booth, Director, Americans for Financial Reform: “The SEC investigation into Goldman Sachs is a major event that will turn the American public even more strongly toward holding the Wall Street accountable for the financial disaster. If there had been a transparent marketplace with real protections for consumers in place, including clear information about subprime mortgages, more transparent information for investors to make the best decisions and rules for regulators allowing them to see what kinds of deals were occurring in the aggregate, these practices would never have reached the point of fraud. We need to put in place strong regulations that will stop all these deals from happening in the dark and prevent these practices before they get to the point where fraud is perpetrated.
“Being investigated for fraud hasn’t stopped Goldman from spending nearly $3 million to send its army of lobbyists to Capitol Hill to argue against any laws that could have prevented this fraud. Goldman and other big banks are spending$1.4 million a day to fight tooth and nail to stop laws that would have prevented millions of innocent investors from buying their toxic packages. They should not be trusted.”
Among the reforms which could have prevented the crisis and which industry players are opposing:
- Exchange-Trading and Clearing of Derivatives: if Goldman’s collateralized debt obligations had been exchange-traded, investors would have known the company was betting against them.
- Banning Proprietary Trading and Bank Ownership of Hedge Funds: putting in to place the Volcker Rule and the Merkley-Levin PROP Trading Act
- Merkley-Levin’s Amendment to Ban Securities Issuers from Creating Material Conflicts of Interests with the Securities they sell.
- Hedge Fund Regulation
- Authority for State Gambling Laws to be used against Derivatives