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Comment by bogomipz | Hacker News Reader

They will pay a 5 billion dollar fine out of the hundreds of billions of dollar they made. That's just the cost of doing business then isn't it. If a regular person is found guilty of fraud they generally wind up inside a jail cell. If a wall street bank does the same, its settled by writing a check behind closed doors and then everyone goes to lunch.

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GS makes around $10 billion a year, are you saying that the profits for the last 10 years or more came purely from sales of MBS?

I know no one has been imprisoned over the financial crisis mess, but settlements like these truly show that the justice department and the SEC are doing a pretty good job at penalising the banks. Combined, the fines probably add up to hundreds of billions, my personal opinion is that this is way more than the banks did from selling these securities.

I'm not following you. I don't understand your point. This fraudulent practice went on for the better part of a decade.

You think that the SEC and DOJ are doing a good job? You are in an extremely small minority then. Not only is this settlement a slap on the wrist its also "engineered" courtesy of the warm and friendly relationship Washington and Wall Street have. Please read this:

http://www.nytimes.com/2016/04/12/business/dealbook/goldman-...

>I'm not following you. I don't understand your point.

You claimed Goldman made "hundreds of billions of dollar[sic]". Their entire profit for a year is around 10 billion. Are you claiming their entire profit for multiple decades came solely from MBS?

It did not.

For the last 5000 years there has been a different legal system for the peasants and the nobility. This is just ongoing proof that that hasn't changed.

But they haven't actually been found guilty of fraud. They agreed to a settlement. To send them to jail, the SEC would have to prove they're guilty in a court of law. Maybe the SEC could do that, maybe it couldn't.

The question is if you want to take a $5B sure thing for some shady behavior or spin the roulette wheel of justice and hope it was actually illegal.

Considering that $5B is a drop in the bucket compared to the damages done, I'd rather they spin the wheel.

The issue is and always has been that company have limited responsibility to allow them more flexibility as opposed to physical persons. This isn't working when the persons making the actual decision is offloading their share of responsibility onto the company. There is a strong dichotomy with the bearing of the responsibility when it comes to economy. I am not sure we can break this habit as long as we consider that the "freedom" of having jobs is one of the most important thing in this world. Or maybe the definition of job needs to change radically. Hopefully, we will see how things pans out with the more menial jobs automation there is.

Except they won't even pay the $5 billion. After "qualifying" for various deductions listed in the fine print and taking advantage of the tax benefits (no, I'm not kidding), the final payment will be closer to $2-3 billion.

Can you give a citation on why you think Goldman made 100s of billions of dollars on mortgage backed securities?

Remember different parts of the firm were on both sides of those securities.

Would you feel better about a 5 billion dollar fine (in addition to the previous multi billion dollar fines) if they made 2 billion on mortgage backed securities?

Not hundreds of billions, but GS received $12.9 billion as part of the AIG bailout. AIG had basically written insurance policies it couldn't pay, so the government stepped in.

I don't doubt that GS is worth our scorn, nor that they peddle in influence (I'd go so far as to say that we should in act laws to limit that influence peddling).

But, punishing GS for an act we don't like that another actor did (the government underwriting a private insurance company) is not how the law is supposed to work.

I for one, am very uncomfortable with punishing an entity for not understanding the technical aspects of their business nor for using made up numbers to justify why a punishment is just.

I'm not saying we should punish GS for getting $12.9 billion.

I'm saying that, in light of the totality of events, this $5 billion fine is not meaningful.

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