Tags: sec | suits | paralyze | goldman

Analyst: SEC Suits Could Paralyze Banking Industry

Monday, 03 May 2010 01:59 PM

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Ralph Silva, director of the Silva Research Network and former Goldman Sachs employee, says the SEC lawsuits could paralyze the financial services industry.

“I have a moral issue with Goldman right now,” Silva says.

“I think they’re trying to give enough material to President Obama that he actually imposes some tax on the banking system because for Goldman, it’s not going to be that serious an issue, but it’s going to hurt every one of their competitors," Silva says.

“This bonus pool they’re paying out is the worst possible timing, and I think they’re doing it on purpose,” Silva told Bloomberg.

Silva says that if the Obama administration starts taxing the banking industry, no politician can stand up and say, ‘We shouldn’t do that’ because the industry just handed out $5 billion in bonus payments. So basically, there’s no way they can defend against Obama bringing in a tax.

“I think it’s a fait accompli,” Silva says. “We’re going to see it.”

Silva says he doesn’t hold any shares in Goldman currently “but wouldn’t have a problem buying some” if the bank did more outside of the U.S.

“They’re very U.S.-centric,” Silva observed.

The British Financial Services Authority has opened an investigation into Goldman Sachs following accusations in the United States that the firm had defrauded investors, The New York Times reports.

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