There were questions as to why Paulson was not charged as well, but the bigger question for the banking sector is whether the SEC charges against Goldman will be the first in a wave of fraud charges over similar subprime mortgage selling practices at other big banks.
A specific Goldman vice president in charge of the subprime mortgage product, Fabrice Tourre, was also charged in the SEC complaint. Tourre was instrumental in creating and selling Abacus.
Will Goldman be able to play the fraud charges as the actions of a rogue official operating from within the bank, or will the SEC's Goldman suit be just the first of many indications that the banking industry knew exactly what it was doing in piling up and packaging the toxic mortgage debt and selling it to investors?
The biggest issue may ultimately be whether the SEC's fraud charges against Goldman Sachs serve as the political weapon needed to pass a financial reform package in Congress, and just what that reform package will mean for the big banks' bottom line.In light of all this, what do you think of the bigger question about the renewed scrutiny for banks? Is Goldman merely the tip of the SEC iceberg? Or is this an isolated incident? Take our poll below to learn the consensus of TheStreet -- and don't hesitate to leave a comment, while you're at it.
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