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Obama Delivers Goldman's Head on a Platter

Senior writer Dan Freed says the SEC's charges against Goldman Sachs show President Obama has finally gotten his regulators to squeeze Wall Street.
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) -- The American public wanted a head, and its president finally delivered what may be the only one that would suffice.

No single firm can be said to symbolize Wall Street in the mind of the public so much as

Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. Report

, which was charged with civil fraud by the

Securities and Exchange Commission


Goldman Sachs CEO Lloyd Blankfein

It took President Obama a while to catch on, as he is not vindictive by nature. Whatever corporate America may think, Obama wasn't looking to make Wall Street CEOs into his enemies. If that were his mission, he wouldn't have hired Tim Geithner as his Treasury Secretary. Geithner likes to brag about how he has never worked on Wall Street, but this

profile of Geithner

by Gary Weiss makes the best case I have seen that Geithner was a tool of the big banks he was supposed to regulate as New York Federal Reserve Chairman.

Indeed, as

The New York Times

has reported, former

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(C) - Get Citigroup Inc. Report

boss Sandy Weill once

tried to lure Geithner away from the Fed

to run Citigroup.

Mary Shapiro, Obama's choice to run the SEC, may have been an even bigger joke.

Geithner has shown that he could not ascend as high as he did if he had no spine whatsoever. Obama had to embarrass him by pushing octogenarian former Federal Reserve chief Paul Volcker to the front of his regulatory team, but since then Geithner has adopted a tougher tone on regulatory reform.

One good example of the new toughness is the increasing likelihood that the vast, unregulated over-the-counter derivatives market

will finally be subject to some policing


Shapiro, on the other hand, had spent most of her career in various "self-regulatory organizations." In other words, it was her job to watch and make sure the cops weren't coming while the firms she was officially regulating stole all the jewels.

Any doubts about the fact that Shapiro was bought and paid for by Wall Street disappeared when the SEC

tried to settle


Bank of America

(BAC) - Get Bank of America Corp Report

for $33 million after finding that its leaders never bothered to tell their investors about what turned out to be a roughly $15 billion hole in the balance sheet of Merrill Lynch.

But it now appears that Obama has gotten the memo from the public and passed it on to Shapiro. Here's what it said: GET GOLDMAN OR YOU'RE FIRED.

She got it, and she got 'em. Guess she'll be keeping her job.


Written by Dan Freed in New York



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