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SEC Charges Goldman Sachs With Fraud On Subprime Mortgages, Paulson & Co. Implicated
Washington, D.C., April 16, 2010 — The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.
"The product was new and complex but the deception and conflicts are old and simple," said Robert Khuzami, Director of the Division of Enforcement. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party."
Kenneth Lench, Chief of the SEC's Structured and New Products Unit, added, "The SEC continues to investigate the practices of investment banks and others involved in the securitization of complex financial products tied to the U.S. housing market as it was beginning to show signs of distress."
The SEC alleges that one of the world's largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.
According to the SEC's complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1 (ABACUS) all represented that the RMBS portfolio underlying the CDO was selected by ACA Management LLC (ACA), a third party with expertise in analyzing credit risk in RMBS. The SEC alleges that undisclosed in the marketing materials and unbeknownst to investors, the Paulson & Co. hedge fund, which was poised to benefit if the RMBS defaulted, played a significant role in selecting which RMBS should make up the portfolio.
The SEC's complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure. Given that financial short interest, Paulson & Co. had an economic incentive to select RMBS that it expected to experience credit events in the near future. Goldman Sachs did not disclose Paulson & Co.'s short position or its role in the collateral selection process in the term sheet, flip book, offering memorandum, or other marketing materials provided to investors.
The SEC alleges that Goldman Sachs Vice President Fabrice Tourre was principally responsible for ABACUS 2007-AC1. Tourre structured the transaction, prepared the marketing materials, and communicated directly with investors. Tourre allegedly knew of Paulson & Co.'s undisclosed short interest and role in the collateral selection process. In addition, he misled ACA into believing that Paulson & Co. invested approximately $200 million in the equity of ABACUS, indicating that Paulson & Co.'s interests in the collateral selection process were closely aligned with ACA's interests. In reality, however, their interests were sharply conflicting.
According to the SEC's complaint, the deal closed on April 26, 2007, and Paulson & Co. paid Goldman Sachs approximately $15 million for structuring and marketing ABACUS. By Oct. 24, 2007, 83 percent of the RMBS in the ABACUS portfolio had been downgraded and 17 percent were on negative watch. By Jan. 29, 2008, 99 percent of the portfolio had been downgraded.
Investors in the liabilities of ABACUS are alleged to have lost more than $1 billion.
The SEC's complaint charges Goldman Sachs and Tourre with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.
# # #
For more information about this enforcement action, contact:
Lorin L. Reisner
Deputy Director, SEC Enforcement Division
(202) 551-4787
Kenneth R. Lench
Chief, Structured and New Products Unit, SEC Enforcement Division
(202) 551-4938
Reid A. Muoio
Deputy Chief, Structured and New Products Unit, SEC Enforcement Division
(202) 551-4488
Full Lawsuit:
Fabrice Tourre's FINRA record:
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This is what we are missing before we can have a recovery, somebody to sacrifice on the alter. The board of GS would do just fine.
Followed by class action $$$s
A squid on an altar.... yes that's a nice image
the ponzi is finally exposed to the public....funny gold is tanking?
Gold tanking? It is within spitting distance of the all time high.
For SEC to investigate, a bit shot has to lose a couple of million. Billions lost by main street peasants do not warrant an investigation.
So, is Paulson & Co. just an interested bystander here? Or are there more charges to come?
I see criminal charges on the horizon. And it will be contagious.
Huh. Gotta believe this is all for 'show' and nothing significant will come of it (either for GS or financial reform)....
http://www.youtube.com/watch?v=3GwjfUFyY6M
Mary Shapiro made the announcement right before leaving for a ski vacation...
now we know why Liberty 33 wasn't pressing the "buy" button this morning.
Leaked again
Could Goldman be guilty this time?
Could the SEC be right this time?
Could? Could?
Does a bear shit in the woods? Is the Pope Catholic? Do politicians lie?
This is being done to appease the public and will end in not much more than a slap on the wrist of GS.
the public ,, to appease the public throw a slab of meat on the floor ,
they gobble this up with all fours ,
Gold must fall manipulators at work maybe. Maybe that will be the next law suite. We can only hope.
If this is proven, they are fucked:
"The SEC's complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure."
Agreed. This should not be difficult to prove and probably already has.
They have sufficient data from an insider at Paulson. There's no way they can buy their way out of this and the multitude of suits to come.
Leo: you are right and read the complaint. It's worse than that. The entire Paulson short-scheme was never disclosed, and steps were actively taken to mischaracterize it to ACA. GS is fucked.
Lloyd and his flacks, Cramer, Lucas von Praag, etal., would liker to please believe that it al;l depends on what is is.
This is great news as long as SEC can really get it going. But can they? :S
LOVE IT. I worked on this investigation for 2 years (for the bad guys), I love this, bring the billable hours!!! This will take YEARS. Weak settlement with small fine and slap on the wrist for one or two people, as jsp will have long forgotten about this. and the lawyers win again! could be the start of a tidal wave similar investigations of TBTF's.
The legal bills are the best penalty going.
Very intersting observation... thanks for posting this.
Not to worry, GS likely hedged its legal exposure 20:1. They stand to profit handsomely from this dust up with the SEC.
/s
You worked for the SEC???
I'm only a few chapters into the book "The Big Short" but this sort of thing is clearly discussed.
BTW, some of us would appreciate it if the comment section of articles discussing the Mideast didn't sound like excerpts from "Mein Kampf." How about some moderation by ZH?
Goodwins Law
Fuck you and fuck off. No moderation on ZH. Never was, never will be. If you dont like it there is plenty of Internet out there. Har Har Har.
BTW
I hope something, other than a fine and not admitting any wrongdoing comes out of all this.
LOL! thanks CB
Hello, My friend,,
I was Moderated by Marla.....I would be happy to point to that post, but the Search option on the home page seems to missing....Database venerability and resource deficiency....I donated.....
It was related to my Massive post...needed to be relegated to the forums..as I remember it..
Don't be so lazy. Mein Kampf? How did you draw that conclusion?
Maybe you need a dose of reality:
http://www.youtube.com/results?search_query=orthodox+jews+burning+israel...
This is such a joke. The SEC is now finally on the case. Read "The Greatest Trade Ever" and you can see that ALL the banks were doing this, especially GS and DB (Lippman). Just like the good old US selling arms to both Iran and Iraq.
Goldman employees seen flocking to the SEC in large numbers to be first to rat on all of the other stuff that went on during the Bush Fraud Moratorium!
If you rat out the big boys do you not get a percentage of the action as a Whistleblower? Big incentive now to blow everyone on Wall St.
That is a hell of a lot of oral sex. Just, eeew.
Not as much as you might think.
Most are dickless dweebs cosplaying as alpha males.
Sushi, I think you're on to something. Now that the Government is balls deep in everything financial, like AIG, the words that pop to mind are "Qui Tam." Not my area of the law, but ...
Thank u so much dude for sharing your wonderful experiences with all of us. I'm gonna come back again looking for some updates. Thanks.
Ruby Genders,
cheap motor trade insurance
GS will level 100% of blame on Fabrice Tourre, will argue it had "no knowledge" of any of these allegations, will have Fabrice tarred and feathered. The question is whether the government will offer Tourre the opportunity to turn states evidence and work with the USG to put together a larger GS conspiracy charge....
This is a civil suit, not a criminal one. GS will probably pay a $500,000 fine and go along their merry way.
think of the hit the stock is gonna take, these people are going to lose millions/billions. but yes, not too much will be done to the actual firm. however, this may be the start of the light shining in. i am not naive enough to think its gonna change the world, but there will be pain.
how do you know that other investors will not sue GS or other bansk who did this scam ?
Must repay $1B losses to investors. Will be taken from the lunch money account. No pizza for a week!
SEC ...An A+ for effort.Something is broken.
GS stock -9.95% and dropping...
The loss already to shareholders is -9,646,162,500.
That's no 'small fine.' I realize not every shareholder is corrupt, but in some small way, that's justice for supporting such a company.
For every $0.01 the stock drops, the total effect is -5,262,500.
-10.33%.
Burn baby burn...
Whaddayawannabet Goldman was short GS this morning?
Just what I was thinking... bet the GS traders have a strategy in place to profit from this.
Goldman seems always to land on it's feet and walk away smiling.
the only shot the government has to gain public trust is to get these mobster bankers and hang them by there nutts and titts.
The charge and the outcome has already been vetted at Goldman. The outcom eis predetermined. The Admin will tout this as "we are not controlled", we do have horns. Just releasing some pressure. Nothing to read into. IMO.
Ummm... This may have many unintended consequences for the the White House... esp. considering Goldman's ability to move markets.
Goldman owns the government. This is either a show or a serious miscalculation by the administration. We'll find out which soon enough.
Common sense will tell you these miscreant circle jerks are all in this together. The oligarchy is scared shitless the Obama regime may well lose control of congress next year. This is just election time theatre and further market manipulation. The "Booty Pop" of doom should continue in the markets after a couple more hickups. Tom
Obama doesn't care if he loses control of Congress. That would just give him a chance to become all beloved as "bipartisan" with the Rip-off Publicans in the next few years. Politics is a side show. Try to discern the real issues (like whether you're outta debt or not, whether God.....)
I find the comments here interesting, to say the least. As much as the SEC has been chastised-- and deservedly so-- they have finally brought out the guns against 2 of the big boyz.
And all we can conclude is "they'll settle for only $100 million, and all will be fine"????
I understand the sentiment, but this is BIG news. From what I'm hearing from my sources inside the USG, they are far from over. The SEC is slow, and borders on the incompetent-- yet they had enough evidence thrown in their collective laps to bring something meaningful to trial.
It'd be a hoot if Judge Rakoff heard this case.
Well, I guess this could be a huge development in 2 ways - (1) further damage on the PR front, and (2) it should open the doors wide open for certain investors to sue. But I doubt anyone will go to jail.
I think that's the key... whether successful or not (and they should be in this case), it opens up a Pandora's box in potential legal claims.
The SEC will attack on the civil side, as the burden of proof is less onerous than criminal cases... but given this particular case, I could see the DoJ pursuing similar action against the Goldman VP. This "setup" between Paulson and Goldman has been so well known and documented in investment banking circles, it's hard not to have incriminating evidence.
Now if we could only get the SEC to file a suit against the Federal Reserve for market manipulation and/or RICO... that would be some good entertainment.
So does this mean that Paulson & Co = Magnetar? And I thought Paulson was making an honest living?
all a scheme to convince congress to pass financial reform...you watch
ALL YOUR SCHEME BELONG TO US.
Congress has not a clue what it would take to enact "financial reform." Why do you think Goldman Sachs always has the upper hand, always has the Treasury Secretary, the Fed? C'mon, be realistic.
GS initiated this so they could buy more of their own shares on the cheap. Already heading back up.
Let me guess, it's a "buying opportunity?"
Obama! Obama!! Obama!!!
What ?
I disagree with the cynics here, the fact that they are actually being charged is a major change in policy and indicates the era of corruption on Wall Street is coming to a close. The politicians, even after being paid off, always discover that beating up on Wall Street is good politics. Now is the time.
i hope and pray you are right. may be a chance...
I will take the opposite side of that. While these pieces of paper may be noteworthy for a future academics research, it will do noting but provide conversation, legal fees and above all, toilet paper.
Agreed!
This is a major policy change. Let’s hope it gains more momentum.
It’s been almost 2 years since we have had the greatest financial collapse in Western history, caused by the greatest failure in fiduciary responsibility among the financial elite and not a single bankster has been publically named or prosecuted yet.
If you aren't a cynic then you just woke up from a dream sleep of about 5 years duration, rumplestiltskin.
This will amount to nothing, as Goldman Sucks shorted big time since last week when they new the SEC would announce their piddly charges on one deal.
All this was is a golden opportunity (the wolf in SEC charge clothing) for Lord Blankfein to accrue more cash for the December bonus pool, 8 months early.
"I disagree with the cynics here, the fact that they are actually being charged is a major change in policy and indicates the era of corruption on Wall Street is coming to a close. "
Gee, and it only took two years, two books describing the trade in gory detail, a series of New York Times articles detailing Abacus, a few trillion dollars of direct Treasury and Fed subsidies, a Federal judge basically calling the SEC buffoons, and two years of *massive* and undiminished public rage. And who gets pressured? A single fucking jackass who is very low on the totem pole. You're right--ZH posters are clearly too cynical in believing that the deck is stacked against Main Street and that the SEC are a bunch of fuckups.
And this is presuming that you are right about sustained change in policy, which I doubt.
This maybe when the the time when the public has finally come to a general understanding of what happened. AT the same time these guys get to that point where all crooks get, massively over confident, both in the administration and in GS, and then events swiftly take over . Suddenly that "we got this covered " look turns into stark raving fear.
All these people have enemies inside and out. Lets not forget the people they stepped on too. There is a saying, "be careful how you treat people on the way up because you'll meet them on the way down. " They may just help you down too. "Next stair. See it, ah shit, sorry, I thought they replaced that. How's that arm? Want to try again?"
Cue Dueling Banjos here.
Can GS be to this crisis what Arthur Andersen was to Enron?
No because Arthur Anderson was subject to a criminal indictment. In Goldman's case, the lawsuit is based on a civil charge. I am skeptical that we will see any criminal indictments against a corporation (individuals are another matter) any time soon. The consequences to Anderson were catastrophic - resulting in the death of the company and the loss of tens of thousands of jobs. Because of the draconian cost to employees (and political backlash), I just don't see another criminal indictment against a large corporation, no matter how deserving.
So fraud isn't criminal?
Arthur brought it upon themselves. All the Arthur folks I know were employed in no time. And the partners that lost their equity suffered a normal consequence of a partnership gone bad.
I totally disagree with your last sentence. At least I sure hope it is wrong.
So fraud isn't criminal?
That just made me think... Isn't this considered interstate activities? If so, then doesn't RICO apply, which means felony charges? Anyone?
RICO can have criminal or civil forfeitures
I found the following online which might answer your question:
"Civil fraud is usually unintentional because it's something that doesn't start out as fraud, but escalates into fraud at a later point. Criminal fraud is intentional because it's fraud that has been committed with criminal intent."
"Approximately 90 percent of fraud is civil.
Criminal fraud - must show that there was criminal intent to commit a criminal act from the very start
civil fraud - act did not start out as intending to deprive, but escalated to that point. "
I found the following online which might answer your question:
"Civil fraud is usually unintentional
because it's something that doesn't start out as fraud, but escalates
into fraud at a later point. Criminal fraud is intentional because it's
fraud that has been committed with criminal intent."
"Approximately 90 percent of fraud is
civil.
Criminal fraud - must show that there was criminal intent to commit a
criminal act from the very start
civil fraud - act did not start out as intending to deprive, but
escalated to that point. "
Yawn!!! You interupted my morning Dump for that? Things were coming out so nicely. Let's see, Who is running the SEC? Isn't it that Goldman Sachs dude? Mary Schapiros job is to bring him coffee. Rally on. Back to the Bowl I go. Damn, I think shit myself.
+1 shit/
+ 777
We will defend ourselves......with the best lawyers your money can buy.
wow, like maybe I can get in below $150 again...
When was the last time a Goldman Exec was dragged in for passing tips to a hedge fund ? It happened this week.
I suspect they are going to need a corpse, as us zombies are hungry. I doubt it is going to be Lloyd Blankfein (despite the quick $19 drop in GS stock) or anyone near him, at least on criminal counts. Civil damages, however, by anyone who bought a piece of Abacus, could take a large bite out of GS' arse.
As for Mr. Paulson, damn shame about all that volcanic ash, as G650's tend not to like particulate matter. I hear there's a tramp steamer named Black Swan setting sail for Costa Rica out of Baltimore on the tide. Might have a berth available. Triple damages on a $1 billion fraud make the after tax take in 2008 not so special anymore.
Many people have said they wished they could have made as much money as John Paulson did in 2008. After the fines, damages, and lawyer fees, it looks like many will have gotten their wish.
until i see some criminal charges and perp walks, i believe this is just smoke to release the building "anger" at wall street.
but then again i am a cynical,
pessimistic, skeptical, distrustful, negative, suspicious, disparaging paranoid soul.
My charts that i posted yesterday said it all. Resistance and extreme overbought conditions... GS... Going down baby.
http://midasfinancialmarkets.blogspot.com/2010/04/dax-e-nasdaq100-em-pontos-importantes.html
This will just be like Obama saying he was bringing troops home or he was going to get tough on the banks, the nothing happens. Either that or they will use this an excuse for the market to crater
This might be a circus show or it could be the beginning of a long cleansing process, a way for the government to send a message to the banksters and their big hedgy clients, "we are going to fuck you so hard that you'll think twice before you pull this shit off again". We shall see, but I commend the SEC for bringing this out in the open.
Conf call right now with SEC on CNBS ... made it clear "this is the first ..." (action of the structure products unit).
But like you said - we shall see.
There's an obvious complicity here with Paulson... don't think they can skip that if they're serious about making things right in this area.
Funny how front page of Drudge has a report about GS being an "ally" for Obama...
"Goldman is lobbying hard on financial regulation, but that doesn't mean they're lobbying "against" regulation. And they certainly shouldn't be considered White House foes: Goldman was Obama's No. 1 corporate source of funds in 2008.
So when Obama triumphantly signs his "reform" later this year, forget the rhetoric and watch the smart money -- it'll be betting on Goldman."
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/columns/Goldman-rallies-for-Obama-in-Wall-Street-_reform_-90957879.html#ixzz0lHJpFYNb
Now if only GS were charged with this in China. Justice would be served.
Looks like the vultures are pouncing on anything known to be heavily owned by Paulson.
We should make a market on the size of the fine.
Wouldn't be surprised if it was in the Billions ($10-16.7B)
Off topic: odd reaction from gold. Kind of makes me rethink the thesis a bit.
Now we know is wasn't investment skill that gave Paulson his returns.........more like inside information.......never confuse skill with corruption.
Next case -Squid insider-trading last night shorting GS stock ahead of this announcement.
Timing is everything.
This is an expensive (unless you're a defense lawyer...happy day) political charade, a populist play, designed by the Obama Administration to generate populist momentum to get Financial Services Reform passed going into the November elections, so Dems have a talking point. ("We are trying to save the country, but those other guys' want to stop us from saving you from yourselves.")
Watch for the NYT to be the mouthpiece of the Obama thugs, in exchange for better media access to Hussein.
As well, notice who the villains are in this tour de force...a "big bank" and an unregulated (translation = "evil") investment fund...central subjects of the financial reform bill the Obama administration wants Congress to pass.
Congress' version is much milder than the Obama Syndicate's version, hence the need for a theatrical.
The GS charges, although an encouraging moment in the history of justice (from the perspective of those of us in the Capital Markets), will ultimately fade away or dilute over time. That is not the point of this, though.
The Obama thugs will break out the rhetoric that the GOP cannot argue against The Financial Reform bill and all its nuances because they would be acting in support of those committing egregious crimes against society.
Now, back to our regular programming...
Good points, and completely agree about how the thugs over in obamaworld are going to use this fiasco for their upcoming agenda
My first post here.
The stock market ticket is falling off a cliff. (Time 8:00 a.m. PT)
Expect that trading will be halted as per guidelines.
http://mondovisione.com/index.cfm?section=news&action=detail&id=87725
NYSE Announces First-Quarter 2010 Circuit-Breaker Levels
31/12/09
The New York Stock Exchange will implement new circuit-breaker collar trigger levels for first-quarter 2010 effective Friday, January 1, 2010.
Circuit-breaker points represent the thresholds at which trading is halted marketwide for single-day declines in the Dow Jones Industrial Average (DJIA). Circuit-breaker levels are set quarterly as 10, 20 and 30 percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.
In first-quarter 2010, the 10-, 20- and 30-percent decline levels, respectively, in the DJIA will be as follows:
Level 1 Halt
An 1,050-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.
Level 2 Halt
A 2,100-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.
Level 3 Halt
A 3,150-point drop will halt trading for the remainder of the day regardless of when the decline occurs.
Background:
Circuit-breakers are calculated quarterly. The percentage levels were first implemented in April 1998 and the point levels are adjusted on the first trading day of each quarter. In 2009, those dates have been Jan. 2, April 1, July 1 and Oct. 1.
===
Of course the computers might just be able to stop the plunge before trading is halted.
jal
You should have held off a day or two.
Please make it your last.
who upgraded GS recently?
Of course they do this on a Friday. This is obviously political and with Futures down last night, they knew this was coming imo.
Interesting that John Paulson gets sucked into this. As a gold partisan I guess it helps the Government to take a swipe at him too. It is not easy to make an honest $1 Billion on Wall Street. The house gets mad at smart people who outsmart the system. This is a brilliant move by Obama, Turbo Timmy, Larry Summers and Heli Ben. Feed the public a "getting tough on Wall Street" in front of election time and at the same time kill off a big holder of gold and a gold partisan. I guess the break out in gold was getting too obvious. Nice move guys.
Having said that, all you get is a little more time as the gold steam roller is going to crush all holders of paper. Goldman will skate after a lot of court time and legal fees and one "bad apple" will be hung out to dry.
Nice move guys. But your remaining time is very short........
Ok, so just so we are really fucking clear. Bad employment numbers, nada, weak consumer sentiment, not much, housing, not a worry in the world, but threaten to lay a finger on the golden ball of Goldman Sachs and the arse falls out of the market. This is the same thing as when the announced the Volker reform.
So, to be clear, the only thing that is holding the market together is the unfettered ability of the big banks to make money.
+1. Well said.
Very well said indeed, but we kind of already knew that.
Sure - but I loved that he managed in less than 100-words to say it in such a way as to make it crystal clear to even a moron like me.
The centrifugal force and nature of: size, momentum, diversity, reflex, habit, hope, perseverance and strength is what currently holds us together, in orbit instead of utter chaos.
ABN Amro and IKB were just identified as ABACUS buyers (clients who were sold synthetic CDOs fraudulently)
The SEC charge opens the door to further fraud charges against Goldie.
The trouble is that many defrauded clients are not just wealthy clients but foreign entities, municipalities, retirement finds etc....
The line forms here for future complaints of fraud and lawsuits. Phones are ringing off the hook in attorneys' offices as we speak.
the cockroaches are all running for the cracks -- in the futures.
The sec is going to take on THE FIRM
[best dr. evil] Riiiiiiight[/best dr. evil]
At what time today do PMs reverse?
Looks like the shit is about to hit the fan and the oligarchs have decided to bail out of this particular corporate shell (i.e. GS) throwing it to the wolves and possibly setting it up to be the "fall guy" for a lot of other shit about to become public. Rest assured, connected insiders must have already packed up their shit otherwise SEC wouldn't be touching GS with a barge pole. Billions in payments from US taxpayers to the crooks have already passed thru this shell, not to mention the recent heavy-handed looting and pillaging that has occurred in the "markets" - the final hail mary pass (kinda like the one occurring in the Treasury "market"). Seems like GS has served its purpose. Unless and until those payments are disgorged, it is simply a PR operation.
Or, it might be just to restore some credibility to the SEC/US Govt. with the end result being that Goldman pays a small "fine" (as somebody pointed out). A lot of positive PR for the govt. that it is going after the crooks with no concrete outcome.
That would be the rosy scenario, GG. We can hope. But, look what Paulson's gold position is doing to the price this morning. His Midas touch has tarnished the outlook.
A good opportunity to buy the physical, IMHO.
http://www.tavakolistructuredfinance.com/Gold.pdf
"A good opportunity to buy the physical"
What physical?
Time to catch up on your reading this weekend.
Gold is falling, got to make it look unattractive. Those jumping equities...
we all know mary is not behind this! is barack behind this? summers rumoured out. volker back at helm. rahm rumoured out. geithner next? will he exact a pound of financial oligarchy flesh to win in novemeber? anybody?
Come on Rakoff!!! Get the case!!!!
I have never rooted for a judge before.
Come on guys, as if SEC is actually going to do anything.
They will settle with GS for about $50 million dollars. Look at what happened with BAC and MER. $30 million. No one blinked.
GS will handle all nice and cleanly.
Agree 100%. The timing on this was pre-planned and I'm quite sure that the big boys were all well positioned prior to this release. The ISEE index is through the roof and retail longs have been decapitated on this OPEX Friday.
I trust nothing from our criminal government.
Great time be buying gold, silver, and miners.
Calm down guys, the Fabrice guy is from London, wait for the moment when they start to go after US based guys, for now it's just helping Wall Street. All bad boys are from London, of course!
Any settlement less than $10 billion is a fucking outrage.
$50 billion will keep the natives in their huts.
The Plunge Protection Team should be kicking in any minute now..... Maybe they'll move the discount rate back down. lol
Finally.
1) Looks like financial reform bill will be hitting the floor of the Senate next week, can't wait to see the GOP oppose it now... later Mitch McConnell.
2) Nice that the SEC is back in action against this bullshit
3) Great timing, if they tried this a year ago, the markets and economy would have continued to sink to worst than great depression levels, and now, the bankers got $B in bonuses, the market is at 11K and now if they decided to sell off in an effort to fuck the administration, they would look even more criminal. The Administration has provided it self ample cover to prevent any further sell off to make it seem as if something they did caused a further drop in the market.
4) GS probably shorted itself.
Oh yeah, dont forget about Obama's Financial Reform E-Mail blast today.
Looks like this was orchestrated pretty well.
4) GS probably shorted itself.
Priceless...
Or shitted itself......
4) GS probably shorted itself.
You can be sure or it along with numerous other stocks.
Already made their weeks pay.
Robert Wolf is an interesting name in all of this. He helped Obama raise a ton of money.
Wolf is/was affiliated with UBS.
In 2007, Moody's met with UBS to discuss soon-to-be downgraded CDO's. UBS offloaded them to a hedge fund ahead of the downgrades. Later a suit was brought against them for doing so.
UBS was later targetted by the gov't for aiding in tax evasion.
Obama is the undisputed master at nominating people who don't pay their taxes and/or help others to do so.
If Moody's met with UBS, they surely met with other firms. SEC should target Moody's.
Robert Wolf is an interesting name in all of this. He helped Obama raise a ton of money.
Wolf is/was affiliated with UBS.
In 2007, Moody's met with UBS to discuss soon-to-be downgraded CDO's. UBS offloaded them to a hedge fund ahead of the downgrades. Later a suit was brought against them for doing so.
UBS was later targetted by the gov't for aiding in tax evasion.
Obama is the undisputed master at nominating people who don't pay their taxes and/or help others to do so.
If Moody's met with UBS, they surely met with other firms. SEC should target Moody's.
MARTHA'S VINEYARD, Mass. -- One of President Obama's golfing buddies Monday was a top donor to his campaign and the president of a bank at the center of a U.S. investigation into illegal tax shelters.
Robert Wolf, the president of UBS Americas, a Swiss-based bank, joined Obama at the elite, and difficult, Farm Neck Golf Club in Oak Bluffs. Deputy press secretary Bill Burton described the two men as "friends."
irony.
UBS whistleblower Bradley Birkenfeld one day after Birkenfield’s Tax Day clemency request to President Obama. Birkenfeld is serving a forty-month sentence despite playing a key role in exposing the biggest tax evasion scheme in US history.
A bone thrown to the proles to keep them at bay a bit longer.
Obama approval rating surges 32% in last hour
(ok I made that up)
Little snippet in the UK Independent today about GS and Harry Reid -
Reid accused of biting the hand that feeds him
When Harry Reid, the Democratic Party's Senator for Nevada, pitched up to dinner with Goldman Sachs, he must have expected a pleasant evening – the investment bank has supported the Democrats and Goldman's president, Gary Cohn, was hosting the bash to raise funds for the party. As it turns out, Fox News reports, Reid spent the function being roundly abused by Goldman staff for his high-profile criticism of US banks. One executive, taking exception to criticism of bank bonuses, even told Reid: "You don't know how expensive it is to live in New York City." A spokesman said later that Reid left "dumbfounded".
For us UK citizens not entirely familiar with some of your politicians can anyone summarise Harry Reid in a single sentence ?
Democratic Senator from Nevada. Mormon. Liberal 70% of time on votes. Big friend of gambling industry (Las Vegas). Imagine what that means. Works closely with Pelosi. From Nevada. Distant relative was horse theif. Was tangentially involved in Abramoff lobbying stuff. Said Obama could be elected because he was "light skinned" without "negro dialect". Basically, a piece of shit.
You're making him sound way better than he is dude.
Harry Reid is the uncle who is never allowed to be with the children alone.
Was Turbo Tax Timmy with the firm back in those halcyon days?
god i hate that fucker. i had the same prob on turbotax, but i wasn't like "oh wow, I owe no money". i called my employer and got the right forms. he should end it.
Goldman owns the SEC.
Expect a rap on the knuckles fine of a few hundred million dollars at most.
In the good old days this news would = a -300 DOW day.
Probably be back to even at days end. Rally onwards
These freaking crooks along with JPM Chase, Bank of America should be closed down for good. I cannot believe they used our taxpayer money to save these crooked businesses. The SEC better damn do some serious damage to these crooks. We all knew it happened and of course was covered up, now its exposed, shut em down. All of the thieving bastards. This isn't the only fraud GS has committed, lets add up the last 2 yrs on top of what they did before.
Investors should be filing massive fraud class action suits against all these bankers.
I wonder who was short Goldman last night?
As I said a few days ago, I vent my anger shorting GS. I had a short vertical covered this morning 175/180 which I sold between 175-180 last week or two. I was like, damn! what the hell happened to GS today. Made my day boys made my day.