Bank fraud ‘never again’?

With Goldman, the SEC can embolden the regulatory trust.

The U.S. Securities and Exchange Commission charged investment banking giant Goldman Sachs with fraud Friday. On the news, GoldmanâÄôs stock dropped 12.8 percent, eliminating some $12 billion of market value, according to Reuters. The civil lawsuit alleges Goldman failed to disclose the fact that securities it sold were structured to fail by another client, Paulson & Co., which the SEC alleges made $1 billion by betting against them. Many of these assets were insured by AIG âÄî enter domino failure. Goldman Sachs posted record profits last year. Refreshed from $12 billion in bailouts and $14 billion in employee bonuses, it has handily repaid the public. Now, the titan has been revived and the public has consented in the gambit to contain it. Financial reform is being tempered in a Washington awash with Goldman campaign contributions. Lawmakers assure us we will never again see âÄútoo big to failâÄù bailouts. When it was established in 1989 in response to the savings and loan crisis, the regulator Office of Thrift Supervision (OTS) emboldened then-President George H.W. Bush to declare that âÄúnever again will America allow any insured institution operate without enough money.âÄù The OTS has now assumed some responsibility for AIG âÄî a sliver better late than never. Reform must proclaim in bold and common clarity where the regulatory buck stops. As Goldman draws its defense, we again will learn how quickly responsibility can dissipate. The SEC has taken a surprisingly bold first step to assert accountability into Goldman. If we are to believe the titan can be tamed by future regulators, the SEC must act today with bold and common clarity. Or else itâÄôs âÄúnever,âÄù again.