Is the suit against Goldman Sachs a fraud?

The official investigation into the firm’s activities is pointless, says Philip Delves Broughton. Governments are too weak to punish the financial giant

I loathe Goldman Sachs as much as the next man. It’s part jealousy at the firm’s grip on the world’s treasure. Part horror at the parade of bumptious baldies who run the firm and snigger, as the CEO Lloyd Blankfein did to the Sunday Times, that they are doing ‘God’s work’. The only way to rationalise this was to recall Dorothy Parker’s quip that you can tell what God thinks of money by considering the people he gives it to.

Write a cross word about Goldman, and you can be sure to receive an email rocket from the firm’s European PR man, surname Kafka. Goldman is more a succubus than a haven of sunshine, daffodils and smiling babies. That’s how you make billions every quarter, fair weather or foul.

But I also suffer from a grudging admiration for the place. The people I know there are more likable than not, and it’s hard not to be awed by their brain power. No one who calls themselves a capitalist can fail to be impressed by Goldman’s effectiveness. They take the chaos of the world and turn it into cash flowing into their coffers. It is not easy getting that rich.

So when the American Securities and Exchange Commission announced it was investigating Goldman for fraud, I leapt from my seat, hungry for details, delighted at the prospect of both a long, hot gloat and some backstage juice on Goldman’s wizardry. The early reading was good. Goldman was alleged to have deprived investors of crucial information about a basket of collateralised debt obligations, the ‘seedy owes’ at the heart of the financial crisis.