Levin wanted to know whether Sparks thought Goldman had a responsibility to tell its client that it was "getting comfortable" by selling the security short, by betting against it. In other words, did Goldman have a responsibility to tell its client that Goldman's own opinion was that the security was likely a bad investment?
And Daniel Sparks simply would not answer the question. ... But a relentless Levin kept pressing the point, which boiled down to something very simple: Did Goldman have a responsibility to its client to indicate its own evaluation of the securities it was pushing?
Susan Collins, the ranking Republican present on the committee, followed up with an even more direct question: "Do you have a responsibility to act in the best interest of your client?" Seems like a simple enough question, but Sparks could not answer it either, saying only, after much pressure: "I believe we have a duty to serve our clients."
Right then and there, Goldman Sachs lost any chance it had of making a positive case to the American public. Right then and there, Goldman Sachs declared to all who were watching that its vaunted dedication to the interests of its clients was just so much hot air.
Goldman's defenders, if you can find them, will say that Goldman's responsibility was just to broker deals, to be a "market maker." If a sophisticated investor wanted to get on the side of a deal that Goldman was betting against, that's OK. ...
The regulation is evil crowd (both Republican and Democrat) helped precipitate the great recession. Republicans are still defending the private sectors right to go unregulated because gosh... you can trust a businessman before you can trust a government regulator.
Sure regulatory capture... yawn... I'm on board with you. But the answer isn't as simple as it is in Ayn Rand Land. But unrestrained unregulated financial markets devastate the economy that working Americans depend on to pay the bills and put there kids through school
What did Adam Smith say... "people of the same trade seldom meet together... but for a conspiracy against the public..."
Its time for the incestuous relationship between Wall Street and Washington to end. Why again are Republicans defending Wall Street?
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