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Criminal fraud will be tough to prove on Goldman

New organizations are reporting that the Justice Department has opened a file for possible criminal prosecution against Goldman Sachs. The SEC, as has been widely reported, filed a civil fraud case against the firm. The case relates to the Abacus 2007 portfolio of toxic junk that hedge fund manager John Paulson bet against.

It's going to be hard enough for the SEC to prove civil fraud in a case that involved consenting, sophisticated institutional investors on all sides. Hard to imagine that the Justice case will go anywhere. The news leak about opening a criminal file suggests it's all PR anyway.

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