Regardless of the reasons why the Justice Department is suddenly visible, I wouldn't sell them too short on the Goldman Sachs investigation and now JPMorgan. That's because the US Attorney's Office in Manhattan (the Southern District of New York) is now involved and spearheading the investigation against GS and now possibly the JPMorgan case too, though I haven't heard that yet.
That office with its extensive experience with such matters may be doing the Justice Department's heavy lifting involving GS. I hope so. I've been waiting to see if and to what extent they might get involved and am glad to see that their investigation of GS, though in a preliminary stage, has been underway for quite some time, having started well before the SEC announcement. And I hear the FBI has been working with them as well.
In spite of any contrary opinions, these Southern District attorneys have been known to be really aggressive, especially over financial fraud cases. As an aside, when Rudy Giuliana was the US attorney in NYC, his office made over 4,000 convictions (a record, I believe, for US attorneys) with only a couple dozen of those cases being overturned. Remarkable. And those convictions included not only financial crimes, but organized crime, corruption, white collar, big drug dealers, etc. Back then I had the opportunity to watch Rudy and these guys in action in NYC. Tough bunch then, probably a tough bunch now.
I have no idea what their record has been lately, but just knowing they've been given the green light to go after a corporation or individual has been enough to buckle some knees. They've been known as relentless.
Though no charges have yet been brought, the fact that they're into this is not good news for GS. If Andrew Cuomo, the attorney general of New York piles on, GS is in for a heap of trouble whether or not their dozens of first-class lawyers save them in the end from any liability, imo. The damage, again imo, could be terminal. Case in point, Drexel Burnham Lambert went under when a criminal case was brought against it back in the 80's. And they even settled to no avail. The fact that the JD is rattling some very big cages, for whatever reason, just might be enough to stop the shenanigans.
One of the main problems with criminal vs civil, of course, is the high threshold for criminal prosecution. The Justice Department (the US attorney for the eastern NY district) lost a criminal case last year when they tried two Bear Sterns hedge fund managers over withholding risks from investors, etc., so that experience has not been lost on the Justice Department. Easier to make it civil which the JD may have to settle for. Time will tell.
Fascinating to watch, though progress is so slow.
