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Goldman Subpoeaned Over Galleon-Related Trading Records

Submitted by Tyler Durden on 05/03/2010 16:53 -0400

As part of today's surprise disclosure of Goldman's outstanding lawsuits (oh, so now it's material), we find that the firm is a party to a subpoena request for potential involvement in the Galleon massive insider trading case. While the existence of the subpoena is surprising, it does not seem to implicate Goldman in any actual wrongdoing. At least not yet. Should the full trade ticket trail indicate that Goldman was executing trades on behalf of Quad Capital and Incremental Capital trader Michael Kimelman, whom we discussed previously, and who is the object of the investigation, it would not be difficult to compare trades executed in flow on behalf of Kimelman and compare these with trades done by Goldman's prop trading desk. Of course, if Goldman prop suddenly decides to take the same side of the trade as Kimelman did at or around the same time, then Lloyd may need to out his PR campaign in turbo boost mode. We hope the presiding Judge on the case Richard Sullivan is smart enough to have requested all of the firm's trading records surrounding the times and dates of any trade potentially executed with Kimelman.

From Reuters:

Lawyers for Goldman Sachs Group Inc have been served a subpoena to testify or provide information in a closely watched case of illegal insider trading allegations, according to a court document made public on Monday.

The subpoena to Goldman Sachs & Co and Goldman Sachs Execution and Clearing LP on April 15, requests “all trading records and monthly account statements associated with account number UF703881″ of Michael Kimelman, a former trader at Quad Capital LLC and Incremental Capital.

Kimelman is charged in a case running parallel with the one U.S. prosecutors are pursuing against Galleon hedge fund founder Raj Rajaratnam. U.S. prosecutors described the probe as the biggest hedge fund insider trading case ever in the United States.

Kimelman was arrested and charged last Nov. 5 along with Zvi Goffer, a onetime Galleon employee who later started the Incremental Capital trading firm, and five other traders or lawyers. They have all pleaded not guilty to an indictment and are free on bail.

The subpoena, signed by presiding Manhattan federal court Judge Richard Sullivan, was submitted by Kimelman’s lawyer Morris Fodeman. It asks representatives of the investment bank’s legal department to appear before the judge at a hearing in the case on May 14.

No other details were provided, other than that Goldman acknowledged receipt on April 19.

Once again, all those who claim that Goldman may or may not be impaired as a result of all these legal actions are missing the big picture. The plethora of already launched lawsuits (and hundreds more likely to follow) will create so much public discovery (tens of millions of emails, BBERG MSGs, AIMs, docs, memoranda) will, like a Mandelbrot fractal, create actionable material for exponentially more lawsuits. The firm will be bogged down in legal affairs, trials and settlements for years to come. But at least it has the ethical blessing of Warren Buffett, whose 180 degree about face on derivatives, is perfectly in line with this endorsement.

- advertisements -

Mon, 05/03/2010 - 17:15 | 329689 Jim Cramer

THIS IS BULLISH NEWS!

BUY BUY BUY!!!

Right Harry. You better not sell any of your holdings when the shit hits the fan. IF YOU ARE SO CONVICTED THAT THINGS ARE BETTER YOU SHOULD RIDE THIS BEAST TO THE BOTTOM AND ALL ALONG THE WAY I BETTER SEE YOU ON HERE SAYING HOW BULLISH THINGS ARE YOU WORTHLESS PIECE OF SHIT. THAT'S ALL YOU GET FROM ME ANYMORE.

Of course there will be more "previously unknown" things that come up, just look at all the talking heads of finance who didn't know about anything that was going on the economy for the last 5 years. Wasn't me, wasn't involved, isn't that the company line now?

Mon, 05/03/2010 - 20:17 | 329926 SteveNYC

Dude, best rant of the day on ZH. Awesome laugh.

Mon, 05/03/2010 - 17:02 | 329698 Mitchman

Mr. Buffett is a man of his most recent word.

Mon, 05/03/2010 - 17:21 | 329725 Aknownymouse

Mr Buffet is a 2 faced aXX

Mon, 05/03/2010 - 17:28 | 329737 Mitchman

Henny Youngman: I never forget a face and in your case, I'll remember both of them! :-)

Mon, 05/03/2010 - 17:45 | 329755 Aknownymouse

LOL. I just can't stand that phony.

Mon, 05/03/2010 - 18:20 | 329792 Problem Is

"Henny Youngman: I never forget a face and in your case, I'll remember both of them! "

Rodney...
MY WIFE... She cut me down to once a month for sex.
That ain's so bad...
She cut some guys out altogether!

I told the valet to grab my bag...
He put his arms around my wife!
<snare><bass kick...boom><hi hat><...rim shot!>

Mon, 05/03/2010 - 23:51 | 330190 Mitchman

+10!

Mon, 05/03/2010 - 17:04 | 329699 Leo Kolivakis

Lloyd is everywhere: Charlie Rose, CNN, and other MSM. I kind of feel sorry for him. Take my advice Lloyd, lay low for a while, your clients are sick & tired of seeing you, especially your big pension fund clients.

Mon, 05/03/2010 - 18:22 | 329803 Problem Is

Lloyd B. God is on the Mr. Andrea Mitchell aka Alan "Crazy Chester" Greenspan legacy rehab tour...

And they are just not Hair Club clients... they are also the Hair Club presidents...

Mon, 05/03/2010 - 17:03 | 329701 Blaise Pascal

We'd have told you about the lawsuits, but you didn't ask.

Mon, 05/03/2010 - 17:08 | 329707 Jim Cramer

LMAO!!!

Why didn't I think to ask???

Well while we are on the subject is there anything else I should ask??

Mon, 05/03/2010 - 17:34 | 329746 Mitchman

Not unless you ask me.

Mon, 05/03/2010 - 17:23 | 329730 buzzsaw99

The squid is everywhere, it is all around us, even now in this very blog. You can see it when you look out your window, or you turn on your television. You can feel it when you go to work, when you go to church, when you pay your taxes...

Mon, 05/03/2010 - 17:43 | 329752 AccreditedEYE

LOL! I have dreamed a dream and it is the destruction of The Squid.

Mon, 05/03/2010 - 17:28 | 329735 SDRII

Now they just need to follow up with an investigation into Friedman

http://www.businessweek.com/news/2010-04-10/fed-had-misgivings-about-friedman-s-goldman-stock-towns-says.html

Dimon / Immelt phone logs and meeting minutes from the FRBNY in the run up to the crisis

Tue, 05/04/2010 - 08:43 | 330494 ToNYC

Stephen Friedman, former ceo of Goldman Sacks'm in the early 90's, is way up on the list of the Axis of Weasels.

Mon, 05/03/2010 - 18:12 | 329783 Richard Weed

Last week... CNBC mentioned GS at least 30 times during each day.

This week... CNBC mentioned the "oil spill" over 30 times just today... and GS was never mention at all.

Question: did GS engineer the "oil spill" as a distraction for the media...? Remember, there are no coincidences.

Mon, 05/03/2010 - 20:06 | 329914 Crime of the Century

Are you saying BP did a squid pro quo?

Mon, 05/03/2010 - 23:50 | 330188 Mitchman

+1000!!!! ROFLMAO!

Mon, 05/03/2010 - 18:13 | 329787 Richard Weed

BTW, isn't one of GS's Directors implicated in giving insider info to Raj...?

Mon, 05/03/2010 - 18:42 | 329832 LeBalance

"It is a crime to leave the mark with any money" - W. C. Fields

The words of death - "We would like you to give us all your records from period A. You will cooperate, right, as you have nothing to hide. Isn't that correct?"

If this were a straight forward society those would be words of death for an org like GS, but since these organizations are crim well "smoke and mirrors do your stuff."

Take your index finger and make a pointing hand, now point that finger directly at your nose, you have found the mark. :)

Tue, 05/04/2010 - 08:45 | 330503 ToNYC

If you walk into a room with GS, and you don't know who the sucker is, it's you.

Mon, 05/03/2010 - 23:16 | 330153 John Self

Probably pretty small potatoes, relatively speaking, but Goldman was also subpoenaed last week in the Lehman bankruptcy. FWIW....

Tue, 05/04/2010 - 01:02 | 330257 Madhouse

We have something for GS and want something back. We want a $12 billion fine paid over 5 years. Gets the taxpayer back for the trouble and Paulsen's back door deal. In the other hand I have a leash for GS - a warning to keep clean. Let's cut the crap with these people and make them do this deal.

Wow, pathological greed is pretty ugly, eh Maestro ? Oh, Maestro ? Where are you ? Oh, its the Oracle now. Sometimes I just wish that George Washington would ride up, get off his horse and just kick the shit out of all of these bad players, crooks and failures. The list of crap hitting us is getting way too long...

Tue, 05/04/2010 - 08:47 | 330507 ToNYC

You can't fine a criminal who will only cause a larger crime to pay off the fine..remember Balzac..the secret of great fortune is a crime forgotten, because it was properly executed.

Tue, 05/04/2010 - 01:49 | 330272 williambanzai7