Theorising the Security and Exchange Commission’s 2010 Settlement with Goldman Sachs : Legislative Weakness, Reintegrative Shaming or ‘Temporary Business Interruption’ for Financial Market Power Elites? (extracts)

The financial crisis has shone a light on many hitherto disregarded market practices and has put pressure on regulators to show that they are policing the markets in order to contain unacceptable practices. In 2010 a prominent example arose in the area of financial market regulation, as the Securities and Exchange Commission (SEC), the US financial market regulator, laid civil charges against Goldman Sachs, a premier investment bank. A settlement was reached involving payment of 550 million dollars – a record for the SEC but representing only a few days' profits for the firm. The settlement is explored here from three perspectives, (i) weaknesses in the regulatory and legal systems, (ii) negotiated justice and re-integrative shaming (Braithwaite et al), (iii) elite theory (Wright Mills and contemporary re-workings). It is concluded that each explanation adds value: the settlement reflects legal weaknesses, a tendency for justice to be negotiated, and elites that were badly rattled by the crises and desired to return to ‘normal'. (http://ssrn.com/abstract=1788868)