Something seems significantly askew about Goldman Sachs' announcement Tuesday morning that it had reaped profits of over $3 billion in the first quarter of this year. After all, wasn't this one of the investment firms that took funds from the US government to help bail itself out after the global meltdown last year? Regulators in both the US and the UK agree with us to some extent as there are now investigations under way in both of those countries into Goldman Sachs' manipulation of faulty financial vehicles into profits made from betting against the investment. Indeed, reports are that the vehicle, mortgage investment, was designed to fail, allowing principals at Goldman Sachs to bet against it and profit enormously. According to experts, it was not exactly an underhanded move as those who invested in the vehicle were professional investors, not naive individuals who were more likely to be fooled by the complexity of the investment. Nevertheless, the US market regulator, the SEC (Securities Exchange Commission), still maintains that the downside of the investment was not explained to investors. More significantly, perhaps, is the simple fact that the scheme was designed to fleece some investors while those in the know, specifically the individual who created the scheme, to make out like bandits and reap enormous profits. Although Goldman Sachs is located in the US, it is not possible to classify this as solely an American problem, as evidenced by the announcement that UK regulators are looking into the company, as well. Despite recent global economic woes, the US remains the global center for investment and it is international investment that sustains companies such as Goldman Sachs. There is no doubt plenty of Saudi money, not to mention that from other countries, involved in Goldman Sachs' shenanigans. If the Americans look to the cooperation of other countries in approach a number of international issues, they also look inside its own borders for behavior that affects the rest of the world. Regulating its financial industry would be a good first step. __
