Sen. Carl Levin said the inability of the Justice Department to prosecute Goldman Sachs in connection with the financial industry collapse shows the need for tough new provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act
The department announced late Thursday that it would not pursue criminal charges against the Wall Street giant. This comes after a two-year congressional investigation, spearheaded by Levin (D-Mich.), found that
Goldman Sachs had allegedly bet against subprime mortgage securities that it was also selling to its clients. Levin, the chairman of the Senate Permanent Subcommittee on Investigations, does not seem ready to drop the issue, however.“Its actions did immense harm to its clients, and helped create the financial crisis that nearly plunged us into a second Great Depression,” Levin said in a statement Friday. “Whether the decision by the Department of Justice is the product of weak laws or weak enforcement, Goldman Sachs’ actions were deceptive and immoral.”
Despite the inaction, Levin is calling on regulators to craft strong conflict of interest provisions into the sweeping Dodd-Frank Act, which was adopted in 2010 as a reaction to the recession. It brought the widest-ranging financial regulation since the Great Depression.
“Yesterday’s announcement makes it even more important that regulators implement Dodd-Frank with rules that do not water it down, and that they enforce those rules with vigor,” Levin said in the statement.
The department said it determined there was not enough evidence to bring criminal charges against the company, which some say helped create the financial collapse in 2008. In a civil case against Goldman, the company settled with the Securities and Exchange Commission for $550 million in 2010.
