Reply #132: Engage in a vast conspiracy to commit fraud...

[JackRiddler]

in collusion with a selection of their clients, the fraud firms that sold the mortgages, the consultants and "analysts" that deceived investors about the junk securities, the ratings agencies that certified known junk as AAA (just months before much of it was downgraded to junk, but by then the suckers had already bought it).

In Goldman's case there's also plenty of evidence of front-running via HFT software, naked shorting of Bear Stearns and Lehman with intent to cause (not merely cash in on) their bankruptcies, and manipulation of the oil market in 2008. They've been a mob for decades.

It's all a question of attitudes, cultural definitions and the will to go after them.

If the mafia was caught on exactly the same evidence doing the same things as GS, they would have been declared a criminal organization. A certain prejudice would have underlain this determination: presumed mobsters who hang out together and happen to get very rich are (with justification) prejudicially presumed to be engaging in a conspiratorial organization structured so as to hide their specific crimes.

This is why RICO statutes were created, to allow prosecutors to have their operations seized.

That would have already happened to Goldman and the rest of the Wall Street gangsters, but because our culture happens to define these particular organized criminals and their vast fraud scheme as "bankers" doing "business," the RICO and other broad fraud statutes are not applied.

If they didn't have the presumption of respectability and of course the terror threat of "too big to fail," you would definitely be talking about them in the past tense. They would have been like Enron and Arthur Anderson: shut them down first so that they can no longer engage in rapine and plunder, then figure out who gets charged with which crime. (Enron went bankrupt of course, but AA was SHUT DOWN, exactly what should have happened to GS, S&P, and the rest.)