The leisurely 6-mile-per-hour upriver effort was greeted with cheers from crowds watching on shore, but the ill-adapted steam engine soon threatened to tear the boat apart. The test was cut short after 15 minutes, and so was Claude’s inventing career. Despite his shore-bound admirers, the Frenchman faded in history after his country’s scientists refused to recognize the achievement. More than two decades later, American Robert Fulton eclipsed Claude’s pioneering effort with the first commercial steamboat trip.
Goldman gets off easy
The Securities and Exchange Commission reached a record-high settlement with Goldman Sachs Group Inc (NYSE:GS) in a securities fraud lawsuit on July 15, 2010. The $550 million penalty was the largest ever to be paid by a Wall Street firm. It was also an acknowledgement that Goldman Sachs Group Inc (NYSE:GS) had misled investors over the infamous synthetic collateralized debt obligation called Abacus — a package of toxic loans that has played a key role in both Michael Lewis’ The Big Short and several extremely anti-Goldman articles penned by Rolling Stone editor Matt Taibbi .
SEC Director Robert Khuzami crowed that the settlement was a “stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing.” That’s not how most of the financial press felt, though. ProPublica dismissed the deal as “less than a tenth of the gain Goldman Sachs Group Inc (NYSE:GS)’s stock [market cap] had” on July 15, 2010, and pointed out that it was only “about two weeks’ worth of profit.” Slate writer Daniel Gross noted that Goldman Sachs Group Inc (NYSE:GS) CEO Lloyd Blankfein “traded a settlement for his job.” Several writers pointed out that the lack of genuine accountability might only serve to embolden the controversial investment bank in any future financial shenanigans, as it could then expect to get off with a comparatively modest fine relative to its massive profits.
Goldman Sachs Group Inc (NYSE:GS)’s profit for the 2010 fiscal year, at just more than $7.7 billion, couldn’t quite pay off the fine in two weeks — it actually took closer to three and a half weeks. The only person who may ever receive punishment for Goldman’s lies appears to be Fabrice Tourre, the former Goldman vice president who helped create and market Abacus under hedge fund billionaire John Paulson’s direction. Tourre’s fraud trial begins today, three years to the day after Goldman Sachs Group Inc (NYSE:GS)’s slap on the wrist.
The article Boeing Takes Off and Goldman Gets Off Easy originally appeared on Fool.com and is written by Alex Planes.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology. The Motley Fool recommends Goldman Sachs.
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