But with its latest lawsuit against Goldman Sachs, the most powerful, most feared and most envied firm on Wall Street, the S.E.C. is sending a signal that it is back on the beat and that it is going after very big targets.
In interviews this weekend, Mary L. Schapiro, the commission’s chairwoman, and Robert Khuzami, its new director of enforcement, said the agency was stepping up both its rule-making and its investigations in the wake of the financial crisis.
via nytimes.com
The British executed Admiral Byng for not being agressive enough. Voltaire quipped "in this country, it is wise to kill an admiral from time to time to encourage the others"
So with Goldman Sachs. By taking on Goldman in one case that the SEC have a good chance on, the whole pack of cards which is the Global Casino could tumble. You can feel how for instance the UK Government, on the hook for billions in bailout to RBS, a "victim" of Goldman; how the German Government, on the hook for Greece, another Goldman "client" are gearing up as they follow the case.
The regulator's ambition, to wound Goldman so badly that the rest will get the message.
A regulator cannot look at every deal. But if it is clear that they will make examples, then the real risks for the player reach a level where some caution is merited.
No British Admiral after Byng for 150 years made the same mistake of caution in the face of the enemy. Byng's execution worked.
