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Cummings And Defazio Say SEC Should Broaden Probe To Include Goldman-AIG Trades
This day is just getting weirder by the minute, as the floodwall holding all the pent-up Goldman inquiries finally breaks. The latest comes from Hugh Son at Bloomberg who informs that Elijah Cummings and Peter Defazio now insist that the SEC should "widen its probe to determine whether securities backed by bailed-out insurer American International Group Inc. were improperly created." And "should any of these transactions be found to include fraudulent
conduct, any resulting contractual payments from AIG- issued
credit-default swaps could be viewed as ill-gotten gains." We'll be happy with Goldman paying back the several billion over and above what the Fed paid it to make its returns on AIG CDS at par. In other words, any profit that Goldman made by buying CDS on AIG, then covering when it knew full well the government would bail out AIG, constitutes insider trading as we have claimed before, and the $2 billion in CDS-related profits on AIG should be immediately refunded.
More from Bloomberg:
It is "not beyond the realm of comprehension" that Goldman Sachs misled investors on collateralized debt obligations apart from the one cited last week by the Securities and Exchange Commission, Democratic Representatives Elijah Cummings and Peter DeFazio said in a letter to be sent to SEC Chairman Mary Schapiro. AIG, rescued by the U.S. in 2008, insured about $6 billion of Goldman Sachs CDOs named Abacus.
"Should any of these transactions be found to include fraudulent conduct, any resulting contractual payments from AIG- issued credit-default swaps could be viewed as ill-gotten gains," Cummings and DeFazio wrote. "It is imperative that the SEC pursue the recovery from Goldman Sachs of any fraudulently obtained AIG payments."
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Check out this hilarous story regarding crooked banker fleeing the scene when he is asked who homeowners should turn to if they need help from the banks. He says come see me, then when everyone bombards him, he hauls ass. LOL EPIC!!!!
http://www.huffingtonpost.com/2010/04/14/jpmorgan-executive-mobbed_n_537...
GS and JPM - Two horns of Satan
Just imagining the day Goldman is gets broken, the day the squids Blankfein first go to jail it puts a smile on my face.
That will be a victory for zerohedge that I was starting to get convinced it might never come.
Wake me when we have clawback.
It is starting to feel like the market is treating this as a non issue at this point. Data this morning on LEI and C earnings seem to be trumping the GS suit. I bet it'll be a footnote by Friday.
HarryWanger....the ultimate tool. Big Dennis Kneale fan too, I bet.
Stop drinking to the Kool-Aide...you really do sound foolish.
Market seems to be supporting my pov on this. Actually, the ones who sound foolish are all folks who predicted this would take the market down. Just follow the momo of the markets. As long as the data/earnings are BTE, the market will continue upward.
Can we get a block feature?
Harry, what we are looking at is the other major players steadying the market so that Goldman can take the terminal hit. The market can function without Goldman. Once Goldman is dust, the political games can begin to see if the exercise should be replicated. The remaining players may not want to rile the golden goose the way Goldman Sachs has.
GS swung positive on a huge volume pump. I couldn't find any news. Feels like we're over the GS "problem" sooner than everyone thought.
Yeah, claw back the AIG scam but also put back all the fed repos, rescind gubmint bond guarantees, force mark to market accounting, and let everyone and his dog sue the crap out of them. That should wipe them out but good.
Curiouser and curiouser. Vicky Ward, of Vanity Fair, reports on a Goldman-ACA connection that should raise any eyebrows not already raised. It seems that Alan Rosenman, who took the helm at ACA in 2004 and increasingly led the company into CDO activities, is married to (or perhaps just living with) Fran R. Bermanzohn. (http://www.huffingtonpost.com/vicky-ward/senior-goldman-exec-is-ma_b_542...) Who's she? A managing director and general counsel at Goldman Sachs. I wonder if anyone at GS or ACA thought to mention this relationship to clients considering a CDO purchase...
I guess we'll find out sooner or later. Meanwhile, we only have to wait until tomorrow to hear Dick Fuld tell Harry Reid's committee all about Repo 105.
They should spend more time on the relationship with the rating agencies - rest is just bull crap
This will be fun if history ends up writing Goldman off as the sole creator of this economic crisis. Global Warming could even be attributed to Goldman.
But of course that would mean GS would have to go the way of Lehman, which may mean another economic histeria crisis and more bailouts.
To date, the Gov/Fed have shown every inclination to make GS whole, hale, hearty and happy. So it follows that any SEC extracted chunk of flesh (as well as related chunks of flesh from follow-on lawsuits like those coming from Europe & friends) will ultimately turn into a chunk of flesh taken from *my* backside, and yours.
Please don't root for further pilfering of my wallet; it is darn near empty from prior pilfering.
Until the Gov/Fed are constrained from ever utilizing TARP/TALF/loan guarantees/interest on reserve balances/0% funding/gifts/rescues of any sort for companies like GS, any hits against said quasi government agencies should be viewed as all out attacks perpetrated upon the US taxpayer and savers in general. To wit, the SEC has *me* in its bore-sights, not their friends at GS, and the insult on the injury is that is most likely just an attempt to win votes for an upcoming election. Ack.
Enough already.
it's all coming down.
I think the Government is trying to make good to the Oracle of Omaha. He is one of the Presidents of the world so to speak. Everyone see's the old man as a Saint, but they don't realize he was a dirty as the rest at one point.
"Lloyd C. Blankfein, Chairman and CEO of The Goldman Sachs Group, Inc. said:
Warren Buffett, Chairman and CEO of Berkshire Hathaway, Inc., said: