How corrupt, cartelized, and conflict-ridden are industry oversight and enforcement practices in the financial sector? You could set about answering that question by poking through the lurid headlines surrounding Goldman Sachs-the latest being the release of Goldman emails openly contradicting the firm's alibi of first resort, that it lost money on the collapse of the housing market and therefore couldn't have been defrauding investors in its short-shelling Abacus fund, as the Securities and Exchange Commission alleges. Or you could look at the ridiculously conflicted status of credit-rating agencies-which collect their fees from the very investment concerns they're supposed to be clinically and impartially sizing up, and which, [...]

1. This morning, Goldman Sachs held its quarterly earnings call and all the questions were about the SEC investigation. "You go to trial — which is what we're doing — but you always have the option of settling," is what Goldman said. In fact, they brought up settling so frequently that everyone's pretty sure they'll settle up and this'll go away. And they'll be using a lawyer with a great brand.

The Securities and Exchange Commission now has three separate Twitter accounts. But if they don't get more followers than Ashton Kutcher by next Friday, Demi Moore will be installed as the new chair.

"As the country was sinking into its worst financial crisis in more than 70 years, Security and Exchange Commission employees and contractors cruised porn sites and viewed sexually explicit pictures using government computers, according to an agency report obtained by CNN." I'm not sure what everyone is so upset about here: These were bored office workers! What else were they supposed to do? Regulate? Investigate obvious cases of fraud and other financial chicanery? These guys already had one arm tied behind their back; I applaud them for at least using the other one to jerk off with.

On Friday, when the Goldman Sachs SEC investigation press release went out, I was working in a Starbucks in a small town. There was a rather normal-looking man, and he was whisper-screaming on his cellphone about Goldman Sachs. I could hear phrases popping out, like "finally going to get them" and "those bastards" and the like. He had lost his mind, and the New York Times quickly followed. The Goldman Sachs SEC investigation-which is the sadsack SEC's unconvincing look at a minor bit of potential malfeasance in a single unit of the company in its transactions with other banks, with a potential fine equal to an extremely small percentage [...]

Good grief. So, to back up a little, the crux of the SEC's case against Goldman Sachs is that it was never disclosed that, when Paulson & Co assembled a motley pile of CDOS for an outfit called ACA to sell to our German bank friends, Paulson actually intended to short against those CDOs. (In popular parlance, "to bet against" those CDOs. And when that package went south, Paulson cleaned up.) So! And now it turns out that a Paulson guy, Paolo Pellegrini, went to the assemblers at ACA and informed them of this! He had an entire meeting scheduled with ACA's CDO person devoted to this [...]

"The Commission brings this securities fraud action against Goldman, Sachs & Co. ('GS&Co') and a GS&Co employee, Fabrice Tourre ('Tourre'), for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation ('CDO') GS&Co structured and marketed to investors." So begins the most amazing complaint to yet come out of the financial meltdown. What the SEC is doing, it seems to me, after doing their reporting, is recasting a rather common business practice as a crime-which is, quite likely, how it should have been considered all along. And the language is rough!