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Marcy Kaptur Writes To AG Holder, Demands A Full Scale Criminal Investigation Of Goldman Sachs
Via Huffington Post:
The Honorable Eric Holder
United States Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, DC 20530-0001
Dear Attorney General Holder:
The U.S. Securities and Exchange Commission (SEC) announced on Friday, April 16, 2010, that it had filed a securities fraud action against the Wall Street company Goldman Sachs & Co (GS& Co.) and one of its employees for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation ("CDO") that GS & Co. structured and marketed to investors. The SEC alleges that:
1. This synthetic CDO, ABACUS 2007- AC1, was tied to the performance of sub-prime residential mortgage-backed securities ("RMBS") and was structured and marketed by GS & Co. in early 2007 when the United States housing market and related securities were beginning to show signs of distress. Synthetic CDOs like ABACUS 2007-AC1 contributed to the recent financial crisis by magnifying losses associated with the downturn in the United States housing market.
GS & Co. marketing materials for ABACUS 2007-AC1 - including the term sheet, flip book and offering memorandum for the CDO - all represented that the reference portfolio of RMBS underlying the CDO was selected by ACA Management with experience analyzing credit risk in RMBS. Undisclosed in the marketing materials and unbeknownst to investors, a large hedge fund, Paulson & Co. Inc. ("Paulson"), with economic interests directly adverse to investors in the ABACUS 2007-AC1 CDO, played a significant role in the portfolio selection process. After participating in the selection of the reference portfolio, Paulson effectively shorted the RMBS portfolio it helped select by entering into credit default swaps ("CDS") with GS & Co. to buy protection on specific layers of the ABACUS 2007-AC1 capital structure.
In sum, GS & Co. arranged a transaction at Paulson's request in which Paulson heavily influenced the selection of the portfolio to suit its economic interests, but failed to disclose to investors, as part of the description of the portfolio selection process contained in the marketing materials used to promote the transaction, Paulson's role in the portfolio selection process or its adverse economic interests.
As the SEC notes, financial manipulations such as this contributed to the near collapse of the U.S. financial system and cost American taxpayers hundreds of billions of dollars. On the face of the SEC filing, criminal fraud on a historic scale seems to have occurred in this instance. As an ever growing mountain of evidence reveals, this case is neither unique nor isolated.
If both global and domestic confidence in the integrity of the U.S. financial system is to be regained, there must be confidence that criminal acts will be vigorously pursued and perpetrators punished.
While the SEC lacks the authority to act beyond civil actions, the U.S. Department of Justice (DOJ) has the power to file criminal actions against those who commit financial fraud. We ask assurance from you that the U.S. Department of Justice is closely looking at this case and similar cases to further investigate and prosecute the criminals involved in this, and other financially fraudulent acts. Furthermore, if the DOJ is not currently looking into this particular case, we respectfully ask you to ensure that the U.S. Department of Justice immediately open a case on this matter and investigate it with the full authority and power that your agency holds. The American people both demand and deserve justice in the matter of Wall Street banks whom the American taxpayers bailed out, only to see unemployment and housing foreclosures rise.
This matter is of deep importance to us. As you may know, H.R. 3995, the Financial Crisis of 2008 Criminal Investigation and Prosecution Act, has been introduced, which authorizes you to hire more prosecutors, Director Mueller of the Federal Bureau of Investigation to hire 1,000 more agent as well as additional forensic experts, and Chair Mary Shapiro of the U.S. Securities and Exchange Commission to hire more investigators to continue to pursue justice and route out the criminals in our financial system. Part of financial regulatory reform should include removing the criminals and crafting a system that supports those who follow the law.
We in Congress stand ready to support you in protecting the American taxpayers from financial crimes such as the fraud that the U.S. Securities and Exchange Commission has charged Goldman Sachs with committing. We ask that you take up this case, and others, to pursue justice for the American people, to put criminals in jail, and seek to restore the integrity of our nation's financial system.
Sincerely,
Marcy Kaptur
MEMBER OF CONGRESS
Also, the Progressive Change Campaign Committee has started a petition: No "Too Big To Jail" - those who wish may endorse it here.
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bravo!!
let's get it on!
I believe it is with a "K", Kaptur.
http://www.kaptur.house.gov/
She is one of the "good guys".
You guys don't get it ... nothing will come of this
GS contributed 960,000 to Obama in his run for the White House
If they are declared 'corrupt' then their donation will be 'corrupt'
Nothing will come of anything aimed at GS. They are not only Teflon but protected by a Gardol shield.
If it gets in the public eye enough, the public will be educated and will insist that something be done.
What is actually done may not be anywhere near what's required, but it will give it more momentum and get us closer to the level of public awareness that ultimately has to be raised.
People know something's rotten. After the crash of 2007-09, a lot of ordinary people like me got pissed off and decided to inform ourselves. For my part, that's what motivated me to read ZH in the first place ... as well as to quit my job and get a Wharton MBA.
We're a long way from doing what needs to be done, but don't underestimate the power of 300 million pissed-off Americans.
Sorry to hear about you're going to Wharton, dood.
Once upon a time it was the top biz school in the nation, turning out the likes of Catherine Austin Fitts, Nassim Nicholas Taleb and that other guy, the fellow who claims to be an enironmentalist while pushing that cap-and-trade scam, I think his name is Jeremy Rifkin and think he's with Wharton now.
Seirously, though, Eric Holder, a k a Mr. Chiquita, who was part of the team that successfully defended Chiquita's assassination squads in South America and elsewhere, is hardly dependable in this matter (which may be why Prez Obama appointed him).
Remember please, the only two to do jail time since Holder has become AG are Bradley Birkenfeld (for trying to expose of a number of the super-rich tax cheats, which includes more than a few senators) and Thomas Drake, for having the audacity to point out the lawbreaking of the former Bush administration in their warrantless wiretapping of US citizens.
Naaaah...I really frigging doubt it, but if youse still believe in that stuff, please sign the petition at this site:
http://act.boldprogressives.org/cms/sign/petition_wallstreet_criminal_pet/?source=luws-
"warrantless wiretapping" - give me a break.
When Obama is done with his "progress" everything you buy, everywhere you go, every doctor visit, every transaction, cell phone call and mouse click you make will be instantly and forever accessible by the federal government. For your own good of course. You can hang out in your basement and make secret wire line phone calls to whoever else still as a wire line phone and talk about the sanctity of your civil liberties.
thank you for the mention of birkenfeld and drake. their stories are a seeming further indictment of the current administration and link it ever closer to the prior one. noticed a shamai leibowitz also nailed for leaking "secrets" (probably highly embarrassing/incriminating) to a blogger. again, thanks.
agreed. My hope is that once GS becomes impossible to defend politically, the politicians will turn on them and throw 'em under the bus. Politicians are rented, not bought.
right but they'll just come back from the ashes in things like One West; wash rise repeat
960k isn't crap to Obama. Feeding on the public anger is worth more. I'm not sayin lloyd is goin to jail, but this won't be a cakewalk either. even if crim charges aren't filed, you gotta like officials pushin for it. populism.
Sorry - what you don't get is "what have you done for me lately". The Republitards in our circus congress are attempting to solicit Wall Street funds by blocking investigation and reform activities. The Dumbocrats have taken the money and run. The Squid may be financially smart but they are being played big time now.
Both parties take money. There is no way to know if a corporation is fraudulent (they will say of course). Now if the repubs turned down money from GS I'd say there was something to that but that isn't the case.
They can be run to the ground and it won't come near Obama imo especially if he backs the investigation and regulation.
What I've never understood is why Robert Kennedy went after Hoffa.
Eric Holder is one of the most useless and incompetent attorneys general in U.S. history. Look for this toady to do absolutely nothing.
He is busy looking for Al Qaeda trial venues.
Don't forget Janet Reno, but I believe your right, Holder even top's her!
But Chiquita's assassination squads swear by him as a defense attorney?????
Agreed!! The easiest way to protect your friends is to make sure there isn't anyone to prosecute them.
It would be tough to decide if Holder is more useless as AG or Kaptur more useless as a Representative.
Can you believe it? Several large banks survive but there are still foreclosures? Holy Moley. Who knew that saving banks would not lead to more people comming current on their mortgage payments? And when every fourth article on personal finance tells them to just walk, don't bother to pay. Because, you know, they only made loans so they could later foreclose and steal your property to make money from it.
Kaptur is an idiot.
While I like Kaptur, wasn't she tied up in some Wall street campaign thing a while ago? Hope not.. but find myself assuming the worst as she IS a politician....
how this keeps going on (and on) is beyond me...
apparently risk is dead... which then begs the question.. what does that mean for reward?
Gub
"While I like Kaptur, wasn't she tied up in some Wall street campaign thing a while ago?"
Negative...negative...negative, copy that???
Kaptur has a consistently anti-freak trade (that's free trade to the self-deluded out there) record and was against the Wall Street bailouts for the criminal class.
Anything else???
This distraction is gaining a life of its own. It is still a distraction however.
Watch Gilts.
...but we're still totally cool with and wholeheartedly endorse Too Big Too Fail.
I hate to be so uncool as to link to the MSM (you know, the guys who fall for all the spin) but the WSJ's lead editorial points out that while everyone worked themselves into a lather over Goldman's newly unveiled legal troubles last Friday the SEC quietly released a report about their own failure to investigate Allen Stanford whose Antigua bank fraud ripped off 28,000 depositors...most whom could ill-afford the wipe-out. This would be the same SEC that also failed to seriously investigate Bernie Madoff who also ruined many retail investors (although most much richer than your average Antiguan bank investor).
Goldman's Abacus deal hurt a large German, institution which was clearly determined to do something stupid with it's money and was not overly concerned with due diligence. Even if everything alleged against Goldman in this deal is true, this shouldn't be a priority right now.
Come on Tyler, isn't there just a chance that this Goldman drama is being orchestrated in part to keep eyes off of other balls?
Look for another back door bad news dump or shady policy maneuver during the next Goldman-gate media circus.
Link to WSJ editorial:
http://online.wsj.com/article/SB1000142405274870467190457519417272214680...
Merc,
You nailed it.
The Dems simply want to deflect the interest away from the incompetence of the regulators, while assuring everyone that the regulators are the solution. Both Stanford and Madoff were really pretty simple to uncover and the agencies had been tipped to the schemes.
"United States Department of Justice, Jack A.S. Staff speaking. How may I direct your call?"
'Yes Congresswoman Kaptur..."
"Eric who?"
"Lady, you have the wrong number."
<click>
Go get'tem Marcy!
She is right about one thing ... the American people don't have trust in Washington and Wall Street.
You can either be part of the solution or by default you are part of the problem.
Quite frankly I don't give a rat's arse now about the social issues any more. Without the wedgies ... fiscal conservatives are finding common ground ... throw the bums out.
Representative Kaptur is the only Member of Congress with balls. Remember when she told Americans underwater on their mortgages to simply mail in their keys? Marcy has long known that we are rife with fraud.
DT.... there is a long historical record that
ovaries are capable of righteous indignation and the resulting actions of demands for justice
How has she stopped waste and fraud in both SS and medicare? If she has not, then she just another poser, period.
Taking my health choices was not the answer. The DNC has lost any connection with reality.
Marcy Kaptur was interviewed by Michael Moore in "Capitalism: A Love Story", and she was excellent, really capturing the frustration of the people. At one point, she said the subcrime crisis amounted to a financial coup d'etat. She showed very well in that film.
Wanna see her in action?
Rep. Marci Kaptur stands up for her constituents, says stay put!
AUDIT AND ABOLISH THE FED -- MARCY KAPTUR
Marcy Kaptur chews up Tim Geithner
SEE MORE HERE: KAPTUR LINKS
When does the investigation into Fraudie (FRE) and Phony (FNM) begin, Congresscritter Kaptur?
ZZZZZzzzzzzz...
gotta start somewhere. anywhere is a start in a target-rich environment.
Forbes, you are going to be sleeping for a loooong time waiting for that. The government doesn't investigate the government being wrong about something. :)
Would YOU really want to look under Barney Frank's hood?
Good stuff, although illiterate. (Should be banks "which" we bailed out, not "whom." Don't want to carry this corporate personhood any farther than we need to. Also, she's trying to decide between "root" out and "rout" and she settled for "route," which is simply wrong. I find it fascinating that national leaders do not know basic grammar and usage. But all that aside, if this letter is delivered, then it may offer evidence that the office of Attorney General is in fact occupied, because I haven't seen any evidence that Holder is actually there and functioning during the last 15 months or so. How reassuring it must be for Blankfein to know it's Eric he must contend with, the phantom AG.
SEC "unexpectedly" showed up out of exile last Friday; maybe Holder was on the same bus and is still unpacking a fresh set of cajones.
Holder has begun processing and evaluating the $$$$ that will be available for some pardons at the end of Obama's term. He wants to make sure he is in the chain for getting paid this time. Maybe that was a part of his strategy of having KSM tried in civilian court as he knows that the guy will be released. How better to collect from the AQ funding sources.
Yes we know Democrats are very concerned about Wall Street...
I have no doubt there exists politicians that are sincere in their desire to see Wall Street pay for their portion of this depression. Marcy Kaptur's sincerity is dubious at best.
Your conclusion is that since Kaptur is a Democrat she is therefore insincere?
Are there some sources for your opinion? If not, your statement is pure partisanship. Or are you just a Coy Mistress?
They have to pretend like they're "doing something." Voters are annoyed that the government has been taken over by a crime syndicate and that no one in government seems to care.
If they really go down this path, we would see senior officials from the Clinton, Bush 2.0, and Obama administrations go go prison, along with senior officials from the Federal Reserve, Treasury, SEC, FNM, etc. etc. etc.
We don't have enough prison space to follow through with this idle threat.
oh let out some of the drug users. there'd be plenty of room. also the continuum of clinton, bush, obama could be extended backward in time a bit. those who think there is some big vital difference between them, especially the last two, are like football fans. they're both football teams playing football. different jerseys though. cheer yourself hoarse.
Thank you, Representative Kaptur, for your relentless pursuit of the Wall Street criminals, including the notorious ringleaders at Goldman "above-the-law" Sachs.
Thank you, Representative Kaptur, for holding Holder to his duty to prosecute flagrant flaunting of the laws.
Thank you, Representative Kaptur, for the many oversight hearings and the probing questions of the perpetrators that can lead to prosecutions. It is a monumental job to ferret out all the past and present crimes.
Thank you, Representative Kaptur,for understanding that the injustice that really grates many Americans is that the paying of hundreds of billions in bailouts is not accompanied by prosecuting the criminal frauds that led to the bailouts. Many criminals who caused the financial crisis are the same people the taxpayers are bailing out now.
Thank you, Representative Kaptur, for championing H.R. 3995, the Financial Crisis of 2008 Criminal Investigation and Prosecution Act.
This Act appears to be the only hope citizens have left for long-overdue justice. Prosecutors so far have failed to bring prosecutions commensurate with greatest financial crimes in U.S. history.
The greatest financial crimes in U.S. history cry out for justice! We need Shock and Awe RICO prosecutions.
The only thing that has any hope of stopping the continual rape and pillage of investors, pensioners, city and state funds, and taxpayers is to see the entire Wall Street RICO crime syndicate and co-conspirators in government arrested and perp walked in handcuffs to federal and state jails.
We need RICO confiscations of the hundreds of billions in illegal "profits" from the criminal enterprises of the banks, mortgage industry, and Wall Street Mafia. We need 20 years-to-life hard time prison sentences.
Thank you, Representative Kaptur, for understanding that rampant criminal activity must be attacked head on, and thank you for doing something about it with the Financial Crisis of 2008 Criminal Investigation and Prosecution Act.
After that blistering article by Tiabbi in Rolling Stone about the lovable squid, it has taken this long to look at Goldman Sachs? For anyone unfamiliar with the American political process, this is a very very good lesson to learn. A company can be described as the biggest criminal gang ever, and be accused of being responsible for pretty much every financial screwing over of the American people, and have absolutely have no defense other than, "Nuh- uh" and "We were the other gunmen on the grassy knoll". And absolutely NOTHING will apparently ever happen to them other than making a shitload of money.
It'll have to come down to this:
a) Martial Law;
b) Mass Arrests on Wall Street and in Washington as well;
c) Suspension of civil liberties and constitutional rights of the accused;
d) Move the accused (I mean the guilty) to Guantanamo and hold the show trials there;
e) Target, in addition to GS, ALL of the following: JPM, BAC/ML, C, MS, The Fed, Treasury, Fraudie (FRM), Phonie (FNM), GEC, Country wide, WaMu, Wells, the whole lot of them...
It would be very hard to imagine this sort of thing going on in China or Russia.. at least there, they know how to deal with crime.
KrvtKpt laughing swordfish
DKM Trading Division
I think Goldman has become a big liability to Obama and the Dems, not just domestically, but internationally.
The Government has to deal with Iran and Al Qaeda and needs some allies to do it. These same allies, whether you like 'em or not, have been consistently drilled by Goldman (UK, Germany, Greece etc.). These foreign governments also want Goldman punished.
Notice how quickly "Fab" was de-licensed by the FSA. People are pissed. It's just good politics now to throw them to the wolves.
Is GS a witch?
http://www.youtube.com/watch?v=yp_l5ntikaU
More congresscritters are signing on to Kaptur's letter as we speak.
I was just wondering, does the DOJ still exist ? Oh that's right, some guy named Eric works there. I'm sure the DOJ has been busy prosecuting whistleblowers who've exposed governmental and banking fraud. Can't have people like that running around in the middle of the greatest financial fraud in history.
Of course, they have a full slate of Constitutional prerogatives to protect like repealing habeus corpus for American citizens, supporting torture, allowing war profiteering/theft and supporting gross 4th amendment violations.
Yes, they have a busy agenda. You'll be glad to know though, they're working jointly with the SEC in an extreme matter of importance. The "Transvestite Porn" division will now be placed under DOJ jurisdiction.
Longing for the good ol' days of John Ashcroft.
Before all you fools start donating money to Kaptur, remember she also voted for Obamacare, the Obama Stimulus Plan, and she has repeatedly voted for increases in the federal debt ceiling.
She is facing a tough reelection this year and is using this charade to deflect her true statist leanings.
Just so. At least some get it.
EURO continues to get a lot of support ...
But USD index chart continues to give bullish warnings.
Euro chart:
http://www.zerohedge.com/forum/latest-market-outlook-0
From Yves over at Naked Capitalism:
A Modern Tale of Financial LossA developer (Goldman) built houses that looked well built, but were in reality designed to be firetraps, using plans provided by an architect (Paulson). They were sold as conforming to code with certain characteristics represented and endorsed by the building inspectors (Ratings Agencies) and overseen by fire inspectors who did spot checks (the SEC).
After the sale, the developer and the architect bought huge amounts of fire insurance on the homes from a friendly insurance agent (AIG London) who was eager to collect the commissions. The amounts that were insured were sometimes well in excess of what a home might actually be worth. They even took out policies on nearby homes that they had not even built or sold.
The developer had also encouraged the city government to allow the firetrucks and safety equipment to fall into disrepair, and for too few inspectors to be hired to do spot safety checks. So when the houses inevitably burned, the fire department was unable to adequately respond. The fires became so bad that they destroyed entire neighborhoods and threatened whole sections of the city.
The developer and architect were able to submit their insurance claims for sums that were so staggering that the insurance company for which the London agent worked was itself facing bankruptcy. This would have placed at risk the holders of its other policies in completely unrelated areas such as life and auto insurance, and retirement annuities.
So the developer had government people, whom he had helped to elect, provide government backing for the insurance company, for the good of the public. The people who had lost their homes and those who were forced to help to pay the developer were very upset.
But the developer was a large advertiser in the local newspaper, and a old school friend of the owner, so it ignored the complaints, and reported on the story from every perspective except what had really happened. It blamed the people who had lost their homes for being foolish and not inspecting the homes more closely, and taking the developer and the housing inspectors at their word, and trusting the fire departments and its inspectors to do their jobs.
And anyone who complained too loudly was at first ignored, then ridiculed, and finally threatened with arrest. After all, the developer was one of the most important and influential people in the city, and had many powerful friends. Any suggestion that they had done anything wrong was simply unbelievable.
After all, it is inconceivable that an upstanding member of the commuity would ever endanger so many people's lives and homes like that just for personal profit.
The End (for now)
When running for office and once you get there, you must be seen to be acting. It doesn't matter whether you actually get anything done, just so you can claim that you wrote a letter denouncing that which your constituents would like you to.
Big fucking deal.
Another hypocritical bandwagoneer politician. Hopefully, she now knows the difference between Hank Paulson and Ben Bernanke.