Fines and Financial Reforms

On May 17th, I wrote a commentary on Mortgage Back Securities. Yesterday, the first part of my predictions came to fruition. I do not believe it to be a coincidence that Goldman Sachs settled with the Security and Exchange Commission the same day financial regulatory reform passed the Senate.

Goldman Sachs paid $550 million. This is a drop in the bucket to the damage that was caused. The financial reform bill will only make it more expensive for the average consumer to get proper financial products. The big boys who helped create this mess will find a new way to game the financial regulations and make money. The smaller financial institutions that were doing things right will have to push the costs on to customers. Ultimately, we look to try to end too big to fail, but we only increase the power of the bigger institutions.

If you want true financial reform, next time the SEC files suit against one of these corporations find them guilty and close their doors. If you shut down a Goldman Sachs or any of the other big players, I guarantee Wall Street will clean up its act.