The US government's suit against Goldman , involving mortgage backed securities, is where their troubles with the UK began:
"Opposition parties last year pressed U.K. Prime Minister Gordon Brown to suspend Goldman Sachs from government work after the Securities and Exchange Commission sued the New York-based company in April. Brown said at the time he was shocked by the “moral bankruptcy” described in the complaint."
And so, after less than a year of penance—if not penitence—we may infer that Goldman has been morally recapitalized.
Goldman Sachs ultimately settled the civil fraud complaint after paying a $300 million fine, and restoring $250 million to investors who lost money on the securities.
James Angel, a finance professor at Georgetown business school, spoke with Bloomberg about the matter: "Most people outside of the financial markets don’t really know the difference between Goldman Sachs, Countrywide and their friendly neighborhood local bank."
If Professor Angel is correct about our collective level of financial literacy, we have far more to fear from the future than I-banks peddling dodgy CDOs.
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