Goldman/Libya ties probed

June 9th, 2011

Boston University School of Law professor Tamar Frankel is an authority on securities law, corporate governance, and legal ethics. She offers the following comments on a report that regulators are looking into dealings between Goldman Sachs and Libya’s sovereign-wealth fund and if any bribery laws were violated:

“So Goldman Sachs is now being examined for various activities with the Libyan regime. The firm has hired an outside counsel, as is its practice, and insists on having done no wrong. It probably did not, in accordance with our laws.

“Many of the enforcement examinations, investigations, and court processes arise after the fact and cost an enormous amount of money, with some results — but perhaps not as strong as compared to their price.

“Are there better ways to induce giant financial institutions’ management to be more self-limiting, even within the law? Perhaps the answer is public opinion. If trust is undermined, financial businesses evaporate. For too long the belief was that if money is made — no matter how — public admiration will follow. Could this belief be proven to have changed?”

Contact Tamar Frankel, 617-353-3773, tfrankel@bu.edu

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