I think criminal prosecution should be reserved for the most outrageous and clear-cut misrepresentations. Look at the examples on pages 6-9 of the government's statement of facts. If any of those folks should go to prison? Should the folks at Microsoft who keep stating that the latest firmware update fixes Surface Book/Pro 4 sleep issues, even though people keep having troubles getting their laptop to sleep properly, also go to prison?
Goldman Sachs, as part of a certain class of institutions, plays a systemic role in the economy and as such, Goldman Sachs, its affiliates and the activities under discussion are subject to innumerable pages of regulations enforced by several different regulators. There is no equivalent regulation for Microsoft's firmware update announcements.
> I think criminal prosecution should be reserved for the most outrageous and clear-cut misrepresentations.
Is this the same standard you apply to any type of criminal prosecution?
I agree with you about Goldman, but we don't yet have the law that makes materially harmful commercial misrepresentations made by systemically important financial institutions a felony. We should, but we don't.
And, one of the very first things the founders said when they booted up this country was "no ex post facto laws".
The link below is a general discussion of securities fraud and related legal theory. Goldman is used as an example while discussing the case settled with the SEC in 2010.
"The law allows a case like the one against Goldman to be alleged and argued as securities fraud even if the seller merely failed to
exercise due care as to whether the buyer was misled about the nature of the securities being sold or how those securities were selected. The
law further permits a claim of fraud—even when brought by a private litigant—to be founded on an allegation of recklessness and allows
the litigant to assert, in essence, gross negligence as to whether the buyer was misled. If one takes the federal appellate decisions on the issue at face value, the law would appear to support a criminal conviction in a case like Goldman’s even if the seller were merely reckless."
