Given the fact that three years ago, the SEC already booked its single biggest win ever - a $550 million dollar fine against Goldman Sachs (GS) - many people have come to wonder why the process is still continuing.
As Reuters columnist Felix Salmon succinctly asks of the current securities fraud trial of Fabrice Tourre, "Why is the SEC, in 2013, still putting so much effort into chasing a single individual?" He aptly describes Tourre as "a minor spear-carrier in the great CDO saga."
Because he's guilty, according to Barry Ritholtz, CEO of Fusion IQ and editor of The Big Picture blog.
"I have this crazy idea that when people violate the law, you prosecute them," he says in the attached video, adding that "the law is very, very specific. You cannot make material misrepresentations or omissions in the sale of securities."
And while many commentators have called the ongoing Federal case everything from redundant to silly, to a belated a waste of time and money that is outright boring, Ritholtz is having none of it.
"(Tourre) has a million dollars worth of legal help that he doesn't have to write a check for," he says of the trader-turned-student's defense that is being provided by Goldman Sachs. And really, he argues, it makes no sense to accept a settlement when "worst comes to worst, we lose, (and) we were going to lose anyway."In investment circles, that would be considered very little downside, especially given the government's spotty prosecutorial track-record of affixing blame for collapsing the world's biggest economy five year ago.
And so while it may make sense for Tourre to roll the dice, so to speak, and hope for an acquittal, that is not really an option for the SEC.
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