(Fortune) -- With the Securities and Exchange Commission filing charges against Goldman Sachs, arguably Wall Street's most lauded and respected firm, it's tempting to say the agency is targeting corporate titans to get its mojo back.
The civil charges leveled last Friday are in fact only the most recent in a string of investigations into some of the largest corporations in the U.S. and the world. Last week, Bloomberg News reported that the SEC was investigating General Electric (GE, Fortune 500) and CEO Jeffrey Immelt; and five days ago Hewlett-Packard (HPQ, Fortune 500) acknowledged that SEC regulators were examining whether the company bribed Russian officials to win business in the country.
These cases aside, former regulators and close watchers say the Goldman Sachs (GS, Fortune 500) case, in particular, might just be the most attractive in the SEC's docket. But in speaking with Fortune, they also raise questions about the motives of the commission, the timing of the announcement, and whether the decade-long "farce" of the commission is finally over:
Bill Black: "The degree of arrogance is astonishing."
"I doubt that they targeted Goldman first," says William Black, a financial regulator during the savings and loans scandal of the 1980s who now teaches at the University of Missouri-Kansas City. "This is an unusually attractive case. I'm a recovering litigator and I still salivate at this one."
Part of the government's strength in the case, notes Black, is its straightforward nature. It alleges that Goldman did not tell its clients that hedge fund manager John Paulson had been involved in selecting bad mortgages for the financial instruments that he then shorted. And it includes emails from Goldman insider Fabrice Tourre who acknowledges impending doom for the products.
"You should lead with these cases," says Black, who thinks the case against Goldman may be one of the government's strongest to come from the mortgage debacle.
"The SEC is a farce. And it's been a farce for a decade ... We got over 1,000 felony convictions in the Savings and Loan debacle of senior insiders. We have zero today -- of any of the senior lenders in non-prime. That's just an astonishing thing. There have been no criminal charges yet in this crisis. That's the dog that hasn't barked. Where is the Justice Department?
"You can see how vulnerable [Wall] Street is despite its sophistication. And its fancy lawyers, and close to unlimited budget. And that's because the degree of arrogance is astonishing."
Bruce Carton: Case is "Positive PR" for the SEC
Another former regulator says the SEC is unlikely to go headhunting for other Wall Street scalps, though it may investigate reports that other firms engaged in similar trades.
"The SEC enjoys the positive PR that comes with pursuing a high-profile name," Bruce Carton, a former counsel with the SEC's Division of Enforcement who now edits a Web site called Securities Docket, says. "But my sense is that they do not specifically target top names. I think they take what comes."
The SEC took an aggressive stance against Goldman Sachs, which wasn't given the opportunity to discuss a settlement before the agency filed its civil suit on Friday. Typically it's common for regulators to offer settlements before lodging a case. But another expert says crediting this action to the agency's newfound toughness may be inaccurate:
John Coffee: Days of SEC's "active collusion with defendants seem to be over"
Professor of law at Columbia Law School and a close observer of the Commission, John Coffee notes that a judge's ruling in the SEC settlement with Bank of America now makes it more difficult for the agency enter into settlements with defendants who neither admit nor deny wrongdoing.
Federal Judge Jed Rakoff originally dismissed a settlement entered by the SEC that disclosed few facts related to Bank of America's (BAC, Fortune 500) disclosures of bonuses paid to Merrill Lynch employees prior to the banks' merger.
"My belief is that Goldman wanted a traditional and non-transparent SEC settlement in which the defendant neither admits nor denies the allegations but is able to censor those allegations that might stigmatize it.
"[But] the SEC understands that the Bank of America case means it can no longer enter into opaque settlements that hide what really happened," Coffee wrote in an e-mail. "It may lose some cases but the days of active collusion with defendants seem to be over."
Brad Hintz: We're all adults here, but "count the silverware"
Brad Hintz, analyst with Sanford C. Bernstein and a former CFO of Lehman Brothers, has never been a regulator, but he has a long history evaluating risk on Wall Street. It's his contention that the parties to the trades should have, and did, know better:
"The ABACUS deal was not an underwriting, with detailed disclosure requirements and high standards of due diligence from an underwriter, it was a private placement. Goldman Sachs wasn't an underwriter, just a placement agent. And everyone in this transaction was wearing long pants.
"I'm not saying that derivatives desks and structured issuance teams are choir boys. As Treasurer of Morgan Stanley (MS, Fortune 500) I used to lock my wallet in my desk and count the firm's silverware before I met with a fixed income derivatives team.
"But if you attest that you are a sophisticated investor and you have a history of actively investing in the structured products you've got to actually do the credit analysis and understand what you are buying."
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