Goldman faces second charges

The US Securities and Exchange Commision's fraud case against Goldman Sachs signals a new era of toughness for the agency, which has been beset by a series of public blunders. It comes as Democrats struggle to pass a financial reform bill.

As Goldman Sachs faces SEC charges of fraud, all of Wall Street is finding itself under the microscope.

Professor Maurice Schweitzer of the Wharton School at the University of Pennsylvania Wharton School of Business said, "These allegations hit at the core of what Goldman Sachs is. And hit at what Wall Street is all about. We need to trust these institutions."

But some say Goldman- which denies the charges- is being used as a scapegoat. Paul Argenti is a Professor of Communication at the Tuck School of Business at Dartmouth and has done consulting work for Goldman. He said, "But it's not just being fueled by sort of media attention it's being fueled by sort of a populist rage against people taking advantage of them and they are looking for someone to blame."

The charges also give new momentum to efforts at financial reform in Washington.

At a news conference on Monday, Senator Chris Dodd, Chairman of the Senate Banking Committee said his version of financial reform would have stopped the kind of activity Goldman Sachs is accused of.

"Our bill holds Wall street accountable and mandates real transparency so that large banks can't gamble our money in the shadows of the financial system." he said.

The timing of the Goldman charges couldn't be better for those advocating financial reform. Paul Argenti said, "I think that the whole point of this case is to set up regulatory reform and using the SEC as the beginning of that and using Goldman Sachs as the biggest fish to fry that's what this is really about."

Later this week President Obama will be in New York to promote his plan for financial reform.