Here We Go Again: Goldman Subpoenaed

Tyler Durden's picture

2010. All over again:


From Bloomberg:

“We don’t comment on specific regulatory or legal issues,
but subpoenas are a normal part of the information request
process and, of course, when we receive them we cooperate
fully,” said David Wells, a company spokesman.

The request relates to the U.S. Senate’s Permanent
Subcommittee on Investigations report on Wall Street’s role in
the housing market collapse, which accused New York-based
Goldman Sachs of misleading buyers of mortgage-linked
investments, the people said. That report was referred to the
U.S. Department of Justice and the Securities and Exchange
Commission, which are also investigating.

A message left for Erin Duggan, chief spokeswoman for
Manhattan District Attorney Cyrus Vance Jr., wasn’t immediately

A subpoena is a request for information and doesn’t mean
the company is a target of a criminal investigation. Analysts
including Sanford C. Bernstein’s Brad Hintz have said they don’t
expect the firm to be criminally prosecuted.


And as a reminder here is why Brad Hintz hopes that should his research ever bring down Bernstein, that the firm will also be TBTProsecute:

“If an alleged violation is identified during a Goldman investigation, we expect a reasoned response from the Justice Department,” Hintz wrote. “In a worst case environment, we would expect a ‘too big to fail’ bank such as Goldman to be offered a deferred-prosecution agreement, pay a significant fine and submit to a federal monitor in lieu of a criminal charge.”

He kept his “outperform” rating on Goldman Sachs. The stock fell $2.32, or 1.6 percent, to $138.41 at 9:55 a.m. in New York Stock Exchange composite trading. Goldman Sachs has declined 16 percent this year through yesterday.

“As politicians continue to criticize the firm and the public scrutiny persists, we believe that Goldman’s clients will begin to rethink their relationship with the firm and the franchise will ultimately suffer,” he wrote. “With approximately 17 percent of the ownership in the hands of current and former partners, this control group has ample motivation to make amends with politicians and the public in order to reduce the threat to its franchise.”

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SheepDog-One's picture

1 govt again trying to sue the other govt...let's see how it plays out!

DeadFred's picture

Last time this happened two just before the top but this time a day after it tanks. Is this evidence Goldman is now frontrunning the legal system?

Careless Whisper's picture

the story reads so much better with this music playing in the background.


btw the phrase  "dead on the money" means bullseye


DavidC's picture

You have to admit though, Tyler, that it makes very entertaining viewing, in a perverse way, watching the Goldman boys with their obvious lies on CSpan.


augie's picture

I must say, express has come a long way in their suit construction.

youngman's picture

another 50 Million penalty...or fine...ooops I mean settlement for a trillion dollar crime...alll is good in squidland

Harlequin001's picture

The Fed hasn't spent the last three years stuffing this company with money through one sided bond trades to have some legal bod take it out over some mere legal matter...

$50 million is ample compensation for mere criminal activity when the survival of the entire western financial system is at stake.

These guys are patriots for christs' sake...


John McCloy's picture

Perhaps that was the true reason for yesterday's sell off. Wall St throwing a warning tantrum either over the theater debt ceiling vote or the GS subpeona. We all know it was not the ADP report since data is always ignored.

augie's picture

I dont go to see the pictures anymore, the theater being played out right now in politics and business is far more entertaining than any jerry bruckhimmer production i've ever seen. Maybe not david lynch status yet, but give it time.

espirit's picture

Well brag about their commodities spec trades in this mornings WSJ, and see where that leads.

Next- JPMC, HSBC, et al.

Vincent Vega's picture

Which is the dog and which is the pony?

Temporalist's picture

Goldman down 3.5% after subpoena report. -Bloomberg

libertus's picture

Could it be that various factions in the government are starting to fight among themselves? As the government collapses, the numbers of groups fighting for the leftovers will be epic. Goldman may find itself isolated as more groups defect from their camp to save themselves. All is not sunshine, lollypops and rainbows in Washington. They know the jig is up. 

Alienated Serf's picture

states and feds always fight.  who do you think shut down spitzer for messing too much ith wall street.

rayban's picture

Wasn't a similar GS legal event the trigger that started thethe April 2010 sell-off, and eventually led to the flash-crash? GS stock reaction today very important.

silvertrain's picture

Flash Crash imminent..

GeneMarchbanks's picture

I've seen this show- great title, amazing preview and a plot that goes nowhere!

Dr. Engali's picture

Die squid die. My put options are looking pretty good right now.

augie's picture

i'm in the same boat, i have 10X jun 11' 1310, 10X jul 11' 1180, and 50X dec 11' 600

if you dont mind me asking, what is your target? i'm looking for an exit on my jun/jul puts. Nice to know what other like-minded-individuals are thinking.


Dr. Engali's picture

Well my puts are on squiddy. I just exited my GS Jun 2011 135.000 put. I still have 100xGS Jan 2012 65.000 put.

augie's picture

lol I find it amusing how most of us have exactly the same understanding of where this market is ultimately headed. Good luck fighting the squid, this subpoena news must be music to your ears.

Dr. Engali's picture

I love it and to see the squid squirm is an extra added bonus. About 2 weeks ago somebody opened up 4000 december 2012  65.00 puts. I'm just following the money.

Problem Is's picture

Oh but you have it! In the form of Cyrus Vance Jr. son of the One-Term-Carter administration douche-bag...

The more things change... the more elite relatives fail upwards in a crony capitalist system...

How else do you explain Shrub Jr. and the Senator's son Douche-Bag Dodd??

Temporalist's picture

I like the clip that Bloomberg chose to use of Blankfein in front of the investigation committee with the hecklers in the background dressed as inmates in their Prison Stripes.

White.Star.Line's picture

Another staged "rooting out corruption" investigation that will produce nothing other than fog, smoke, and mirrors.
If we were truly eliminating corruption in this country, the financial district in New York would end up looking like a ghost town, and government offices in Washington emptied and abandoned.

Problem Is's picture

+5... Excellent analysis... with ghost town analogy!

TopOnePercent's picture

Nothing is going to change until the market structure itself changes.


Glass Steagall, amongst other much needed restrictions.


Otherwise, some old names will be taken out just to be immediately replaced with the same ilk after paying a few small fines.


lizzy36's picture

And by the close a settlement will be announced.

Futures will be pumped into a horrific NFP report, as clearly all is going well in the financial system once again.

Dollar Bill Hiccup's picture

A settlement? Don't be so naive. They will not be tempted by the Government.

Lloyd is out in the desert as we speak, sitting under a tree. He's hungry, he's cold and he just started. After forty days and forty nights, this will all disappear and an angelic choir will sing his praises.

No one said it's easy doing the Almighty's work Lloyd, but you are just the man for the job.

labrat's picture

Clever, real clever.

Let's see, instead of announcing this yesterday around 4:15 or later today, they pick mid-morning of a trading day.

That caused a sizeable and highly predictable move in various currencies and indices... I wonder if they they notified Goldman in advance.

Also, I wonder how much Levin and the Manhattan Prosecutor's Office made on the trade they placed just before the announcement.

Real clever fellas!

Problem Is's picture

Committee to Re-Elect the President
1600 Pennsylvania Avenue, NW
Washington, DC 20500


To: Lloyd "Doing God's Work" Blankfein
CEO Goldman Sachs
200 West Street
New York, NY 10001

Dear Lloyd,

Time to pony up and renew your campaign bribe commitments for 2012.

Much Love, David Axelrod

labrat's picture

Uh... wait a minute.  Maybe Levin and the Prosecutor's Office just let Goldman place the trade for them, and they're taking a cut!

realitybiter's picture

The gubmint = The Mad Regulating Fury.....I'm thinking a red hood, red cape, and lightening bolt across the chest, through a ginormous G


Goldie = Evil Dr Dough....a green outfit, of course, with dollar signs everywhere

Oh, lets get back to the match!  They are coming out together from the same locker room....


ding, ding, ding.....and in this corner....



bhakta's picture

Well if the Dept of Justice charges GS criminally, as they deserve, I think that will be the day we all rise from dead and ascend to heave.

aheady's picture

Already heaving, thank you.

slaughterer's picture

GS sold off the market yesterday to gather funds to short their own stock.  Easy as that. /sarc

I am a Man I am Forty's picture

how does Hintz's outperform rating jive with that last paragraph, this guy is either a liar or a dipshit, and more than likely both

AldoHux_IV's picture

TBTProsecute is absolute horse shit-- these bankster assholes think they commit economic genocide and also be above the law?  The hubris on these scumsuckers.

Alienated Serf's picture

1. manhattan DA is elected, there is some populist incentive (yes, even in NYC) to go after them.

2.  NY gov has always resented fed intrusion/total take over of financial biz it its backyard.  they want nothing more to exert power and be relevant.  don't under estimate how much they want to prove they can pick up where there feds have failed/aided abbeted the banks.

3. NY politics are much more dependant on public employees, welfare recipients and  pissed off people who see the bankers in person then big national party money.  It is good politics to go after them.

again, the feds will do all they can to thrwart this.


MIDTOWN's picture

Convictions, if any should arrive just in time for a presidential pardon.

buzzsaw99's picture

Again AG Holder at the DOJ is a great big pussy.

equity_momo's picture

Goldman isnt TBTF. I wish these industry scumbags would stop perpetuating that myth.

dark pools of soros's picture

a guy named Levin suing Goldman??  why not just make a musical? It would be less theatric