News / USA

Charges Against Goldman Sachs Boost Case for Financial Reform

Charges Against Goldman Sachs Boost Case for Financial Reform
Charges Against Goldman Sachs Boost Case for Financial Reform

Multimedia

The Obama administration's efforts to reform the financial industry is getting an unexpected boost after the Securities and Exchange Commission (S.E.C.) accused one of the largest U.S. investment bankers of fraud.  Goldman Sachs denies it misled its investors by selling them mortgaged backed securities that were expected to fail.  But analysts say the civil charges filed against Goldman Sachs on Friday could lead to closer scrutiny of the way financial firms do business.  

Shares of Goldman Sachs fell for a second day Monday following accusations on Friday that the U.S. investment firm defrauded investors.  
The Wall Street giant denies the allegations and promises to fight back.
But economist Peter Morici says the charges filed by the S.E.C. puts a harsh spotlight on the financial industry.  

"The civil suit raises the level of awareness of deceit on Wall Street, the selfishness and self-serving behavior that needs to be regulated," said Peter Morici. "We might have gotten financial services reform without, but this makes it more likely."

Some economists blame a lack of oversight of the subprime mortgage industry for fueling the global financial meltdown that followed.  

Analysts say the resulting probe into Goldman Sachs investment practices could help President Barack Obama, who delivers a major speech Thursday on why financial reform is needed.  

"And if we don't change what led to the crisis, we'll doom ourselves to repeat it." said President Obama.

Highlights of the reform package include tougher regulations of financial derivatives and securities, along with a $50-billion bailout fund, to be paid for by banks.

It would also establish a new consumer protection agency that will look out for investors, and not banks.  

Republicans don't like the bill.
Senator Mitch McConnell claims the proposed measure only opens the door for future bailouts.

"In fact, if you look at it carefully, it will lead to endless taxpayer bailouts of Wall Street banks," he said.

But retiring Democratic Senator Christopher Dodd, who introduced the bill, says that argument is nonsense.   

"Our bill holds Wall Street accountable and mandates real transparency so that large banks can't gamble our money in the shadows of the financial system," he said.

The U.S. Senate is expected to begin debate on financial reforms this week.
Analysts say foreign markets will be watching closely.
The charges against Goldman Sachs have roiled markets from Asia to Europe.

You May Like

Is Air Travel Safe?

Aviation expert says despite tragic losses of Malaysian Airlines flights 370 and 17, industry experienced lowest fatality rate in recorded history last year More

Multimedia 100 Days Later, Nigerian Girls Still Held

Activists holding rallies in Nigeria and several other countries to mark 100th day of captivity for more than 200 schoolgirls being held by Boko Haram More

Chocolate Too Bitter? Swap Sugar for Mushrooms

US food technology company develops fermentation process using mushrooms to reduce bitterness in cocoa beans, believes it will cut sugar content in candy More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Carriers Suspend Travel to Israeli
X
Carolyn Presutti
July 23, 2014 1:21 AM
The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video US Carriers Suspend Travel to Israel

The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video NASA Focuses on Earth-Like Planets

For decades, looking for life elsewhere in the universe meant listening for signals that could be from distant civilizations. But recent breakthroughs in space technology refocused some of that effort toward finding planets that may harbor life, even in its primitive form. VOA’s George Putic reports on a recent panel discussion at NASA’s headquarters, in Washington.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.

AppleAndroid