Fabrice Tourre: Goldman's sacrificial lamb?

News that Goldman Sachs has withdrawn Fabrice Tourre's registration with the FSA here in London leaves a somewhat sour taste. All too often employees accused of wrong-doing are immediately put on leave as soon as the allegations by this or that regulatory body comes to light. This basically is an at least partial admission of guilt against which the individual has very little redress. It is a truly Kafkaesque situation were large organizations threaten the single person who of course is in a much weaker position than the people behind the bureaucracy. The irony is, that Goldman Sachs prides itself time and again for having a team approach in all it does - so it would be particularly strange that suddenly one single individual can be the only responsible party in such a substantial transaction involving prestigious 'clients'. In Tourre's case, for example, the FSA has no prima facie evidence itself, it just is hanging on the coattails of the SEC. If Goldman Sachs has any reason to suspend Touree is would beggar belief that no one else in the whole food-chain - possibly up to CEO Lloyd Blankfein - has been involved in the transaction(s) that are the subject of the SEC's case against Goldman Sachs (which incidentally is not a case just against Fabrice Tourre).

IMF - full of bureaucrats and tax dodgers

When the IMF bureaucrats call for more taxes on the banking system one can only feel a sense of revulsion. Not enough that politicians think they have to justify their existence by dreaming up a never-ending flood of regulations and spending plans, - but with them we at least have the consolation that they are subject to elections (far too irregularly though). The bureaucrats in the IMF (and similar international organisations, including the EU) face no such threat. They have secure tenure gilded by tax-free salaries. Naturally their instinct is to tax and spend other people's money, the socialist creed that keeps them in their jobs in the first place.

Disclosure no safeguard against deception

The more complicated the securities and investment businesses become, the longer are the legal disclaimers that pepper the front and back of related documents become. No wonder the 'leading' law firms now are located in what only can be described as palatial surroundings. The (mostly) impenetrable legalese is the equivalent of a mugger telling the victim to sign a document that absolves him from risk of persecution. In a sane business environment the law should be simple and not just a starting point for lawyers on their search for loopholes. Regulations should not leave any backdoor and the laws should be included in any transaction by implication. If, for example, a conflict exists between the recommendation to buy a security and the trading position of a broker-dealer it should either be (1) irrelevant or (2) prohibited. So to 'disclose' the conflict is either unnecessary in the first case or should not be an effective way out in case of claims for compensation in the latter case.