Alan Greenspan, Warren Buffett, and Fraud

A few months ago, I wrote about my surprise at Alan Greenspan's relaxed attitude toward fraud. Today, I'm wondering about the attitude of Warren Buffett, who said yesterday, "I haven't seen anything in Goldman's behavior that makes it any more subject to criticism than Wall Street generally."

Mr. Buffett may live to regret those words, especially if the SEC can prove paragraphs of 44 - 51 of its Complaint against Goldman, subtitled "GS&CO MISLED ACA INTO BELIEVING PAULSON WAS LONG EQUITY." As Norman Olch at Full Court Pass wrote back on April 20, 2010:

Thus, for all the trumpeting in the press about an impenetrable, sophisticated transaction, in the end it boils down to a claim of a garden variety fraud: Goldman misstated the true nature of Paulson's involvement, thereby misleading those who bet the value of the securities would rise. Paragraphs 44 through 51 of the SEC complaint are, in my opinion, the practical heart of the matter.