SEC's Lame Goldman Case: Today's Outrage

The sad thing is that the SEC's case against Goldman Sachs shows more weakness than strength.
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WASHINGTON (

TheStreet

) -- I can't believe everyone's still making such a big deal about this

SEC

case against

Goldman Sachs

(GS) - Get Report

.

This is such a pathetic case and the whole thing smacks of desperation. Regulators must have been under some pretty intense political pressure to make such a big deal out of something so lame.

The

SEC complaint

boils down to a nuanced interpretation of disclosure rules. And it's a civil court case to boot -- that basically means the government couldn't come up with any criminal action to bring forward.

This is just about as anticlimactic as bringing tax evasion charges against Al Capone. It's grasping at straws because you can't prove anything more serious.

To be sure, I'm not trying to imply that what Goldman may or may not have done is in any way similar to what Al Capone may or may not have done. And by no means am I comparing the banking industry to the mafia.

I'm just saying that these civil charges by the SEC don't amount to much. Those who may believe that Goldman Sachs -- or any other bank - shares culpability in the mortgage meltdown and near collapse of the global financial industry won't be satisfied with a civil penalty.

It remains to be seen whether anyone will ever be able to prove anything more insidious. So far, I'm underwhelmed by the new post-crisis regulatory resolve.

This piddly case against Goldman is no tour de force that makes the SEC look more aggressive.

This won't make us forget the embarrassing settlement debacle that made the SEC look like pushovers for working out a deal with

Bank of America

(BAC) - Get Report

instead of bringing charges of misleading investors during the

Merrill Lynch

(MER)

takeover. (You know, the settlement that

Judge Jed Rakoff

made the big stink about last year).

So having taken a bruising with its handling of the Bank of America case, this time the SEC looks dead set on taking Goldman to court. But even if the government wins the legal battle, it won't be much of a victory.

We won't be seeing anyone led off to jail in cuffs or witness any other major cathartic moment that will show the world that a new sheriff is in town.

The best the SEC can win with this case is a civil fine -- and that's assuming that prosecutors can really make these charges stick.

Sure, regulators can say they did

something

. I'm just not sure this case is much better than nothing.

--Written by Glenn Hall in New York.

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