GS - I don't necessarily like GS, I'm just calling a spade a spade: the case is garbage, a political ploy devoid of legal substance. The banks knew full well what securities were going into the CDO, and they knew what ratings the securities carried. The fact that they chose to take the long end of the trade without conducting proper hedging and risk management, and then imploded when the housing market crashed, is no one's fault but their own. GS is just a market maker in this process; they did nothing wrong or illegal. (In fact, they themselves lost money).
Going forward, we obviously need more regulation of over the counter securities in order to limit the impact that these sorts of dealings can have on an economy. But that's not a reason to politicize the SEC and weaken its credibility with a garbage lawsuit, and punish a clueless 26 year old in lieu of an entire industry (and society, if we are being honest, because everyone in this country was drinking kool-aid they shouldn't have been drinking, from the investment banks all the way down to the low-income home buyers).
Bottom line: the SEC is going to get crushed in court, that's why GS hasn't offered to settle. The SEC probably already knows this, and doesn't care. The case is being brought simply to make the Obama administration look "tough" on Wall Street, and to help push a legislative agenda. That's crap, and a complete abuse of the purpose of the SEC--to enforce federal securities law.
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