Wall Street mega-banks are posting record-breaking profits off war-driven volatility and billion-dollar IPOs at the exact moment Goldman Sachs is facing congressional scrutiny for keeping a senior lawyer who accepted gifts from convicted sex trafficker Jeffrey Epstein — and the system is working exactly as designed, just not for you.
The contrast lays bare who matters in the American economy. JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup, and Wells Fargo are set to report second-quarter earnings Tuesday, and analysts expect a bonanza. Investment banking revenue could surge 26% from a year ago, while trading revenue could jump 14%, according to KBW analyst Chris McGratty. Wells Fargo veteran Mike Mayo calls it a "sweet spot" — both Wall Street and Main Street profit engines humming at once. But the Main Street he's talking about isn't yours.
The SpaceX IPO alone generated hundreds of millions in fees, led by Goldman Sachs and Morgan Stanley. Goldman also likely reaped so-called "soft dollars" — essentially kickback fees hedge funds pay banks for a slice of oversubscribed IPOs — according to University of Florida finance professor Jay Ritter. "The big money maker for investment banks in IPOs is not the bankers' fee, but the ability to allocate shares to hedge funds," Ritter told CNBC. Meanwhile, the Iran war sent oil prices, interest rates, and currencies swinging, and banks captured the upside of that volatility. CNBC framed it as banks "doing a good job these days of capturing the upside of volatility"; a plain reading is that geopolitical instability that squeezes working Americans at the gas pump is a profit center for Wall Street.
These trends coincide with the Trump administration's push to ease banking regulations, which has helped financial stocks outperform the broader market for two straight years.
At the same time Goldman is cashing in, the bank is being hauled before Congress over its treatment of senior counsel Kathryn Ruemmler. Justice Department documents showed Ruemmler had extensive communications with Epstein from 2014 to 2019 — years after his 2008 guilty plea for procuring a person under age 18 for prostitution. She accepted gifts from him and advised him on handling media inquiries about his crimes. Epstein even called her cell phone the night he was arrested on July 6, 2019. Her spokesperson said it was a brief call and she took no action afterward.
When the documents surfaced, Ruemmler stepped down as chief legal officer but Goldman CEO David Solomon kept her on as senior counsel in an advisory role — a move criticized by Democratic Congressman Raja Krishnamoorthi and Senator Elizabeth Warren, who said it raised serious questions about Goldman's due diligence. Goldman declined to comment. Ruemmler's spokesperson reiterated she had done nothing wrong and had no knowledge of ongoing criminal activity.
Krishnamoorthi said Congress must use Ruemmler's testimony to "pull back the curtain on how Jeffrey Epstein built and maintained wealth, power, and influence." Reuters noted Epstein had extensive ties to prominent figures including President Trump and former President Bill Clinton — but buried the deeper question: why does Wall Street keep circling the wagons around people connected to Epstein?
CNBC celebrated the bank earnings as a "rare combination" of booming activity. Reuters framed the Ruemmler story as a personnel controversy. Neither connected the dots: the same institutions that profit from chaos and shield insiders from accountability are the ones writing the rules. Follow the money. It doesn't lead to your paycheck.
