Monday May 28, 2012

JAPAN NEWS AND DISCUSSION

SEC accuses Goldman Sachs of civil fraud

World Apr. 17, 2010 - 06:58AM JST ( 22 )

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22 Comments

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nylex4Apr. 17, 2010 - 08:05AM JST

Goldman Sucks....
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GJDailleultApr. 17, 2010 - 08:09AM JST

Note that it is a civil case and not a criminal one. We'll see if they actually go after GS, or if this guy Tourre is treated as some kind of rouge employee (ie. Nick Leeson), or a one-off baddie like Madoff. They may sacrifice Tourre so that it looks like something is being done, but leave the system itself untouched.
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bdiegoApr. 17, 2010 - 08:38AM JST

What a surprise! In any case, a civil case is about a hundred times easier to win than a criminal one for the level of evidence required. GS will deny and cry and whine and plead until the last step of denial which is acceptance in the form of settlement.

That said, it's the first charge laid out and not the last. The key to getting criminal convictions is to make someone squeal and rat out their buddies.

They're not going to pursue hard criminal charges also because it would literally put GS out of business like Anderson consulting, and as wonderful that would be there would be too much collateral damage among otherwise innocent bystanders.
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BeelzebubApr. 17, 2010 - 08:46AM JST

To companies like GS, "deregulation" is simply a license to steal. (In the guise of "new financial instruments" that earn nothing except bonuses for the brokers.) They should be fined heavily, and audited from now to kingdom come.
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wanderlustApr. 17, 2010 - 10:37AM JST

Golden Sacks are still too heavily connected to be penalised from this, and they even have a sacrificial fall guy ready to take the blame for it - Japan style. But more damaging is the substantiation that they focus more on making money for themselves than for their clients.
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my2senseApr. 17, 2010 - 11:27AM JST

and the hitmen go to work..... no one ever believes me or says its only the movies but this is how guys....nuff said. I have never gave a penny to Wallstreet and never will.
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SuperLibApr. 17, 2010 - 11:56AM JST

The SEC said Paulson paid Goldman roughly $15 million in 2007 to devise an investment tied to mortgage-related securities that the hedge fund viewed as likely to decline in value. Separately, Paulson & Co. took out a form of insurance that allowed it to make a huge profit when those securities became nearly worthless.

What a nice scam. Convince Goldman to package investments that you think will fail and have them sell them to bank across the world, then profit when they in fact do fail. Goldman was essentially Paulson's middle man who did the dirty work of actually convincing others to buy the investments while he hid in the shadows with his insurance policies just waiting for the investments to go under. One man's company gets extremely rich and others lose billions and jobs are lost.
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seaforte03Apr. 17, 2010 - 12:06PM JST

this sounds like a slightly more sophisticated version of the pyramid scheme - tell half the clients to buy, half to sell...only in this case they used inside information from one client (paulson) to manipulate the demise of other clients by selling them doomed investments.
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GJDailleultApr. 17, 2010 - 06:40PM JST

Actually if I was smart enough I would commit the perfect crime. Which appears to be what Paulson did, it looks like he didn't break any actual laws, and will get away with it. Goldman and Tourre maybe will too.

It does explain maybe how Blankfein could sit before Congress and say with a straight face that Goldman was just hedging with their AIG trades. They were hedging the contracts they had with Paulson, and as said above about the sales of investments, were just the middle man on this part of the deal too. Meaning the American public paid off on the contracts, if that was the case.

Have to say though that I am a bit amazed to check these comments and see that many of the usual JT American posters have not posted anything on this topic. I guess they don't understand the concept of "Know your Enemy", or in fact don't even know who their enemy is.
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BholderApr. 17, 2010 - 06:46PM JST

basically this admits that the whole depression is artificially created with clear intention of enriching chosen few by defrauding whoever buys the scheme. however, we all know the results, too big to fail will just keep getting bigger (and thus more infallible) and the risks will be pushed again on non-suspecting public who will keep paying through their noses. but for how long? and what happens when (not if) the red line is crossed? well i for one am looking forward to it, it cant get any worse anyway
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TumbleDryApr. 17, 2010 - 07:23PM JST

Ah.. almost forgot, not regulations. Only communists want regulations.
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SuperLibApr. 17, 2010 - 09:20PM JST

The world is shifting away from fundamentals. These derivative gambling games are starting to influence people's confidence in an investment even if they know little to nothing about it or have nothing invested. I can take out insurance on a bank failing. Others see I do that and think I'm on to something so they do the same, and maybe even sell the stock short. The result? There's a panic at the bank not because of the any their fundamentals, but because people who have no money in the bank are betting it will fail and are now taking steps to make it harder that the bank actually succeeds.

What this guy did was take it one step further. He created assets that he thought would fail, had Goldman sell them as attractive deals, took out insurance on them failing, then cashed in when they did ultimately fail, which was exactly what he was hoping would happen from the beginning.
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5SpeedRacer5Apr. 17, 2010 - 09:26PM JST

"this admits that the whole depression is artificially created with clear intention of enriching chosen few by defrauding whoever buys the scheme."

Karl Mark identified the scheme in about 1848. But did anybody listen? Nope. Everyone was too busy hunting socialists. Recent history has shown that capitalists in the US increasingly destroy the middle class and boost their ownership of the means of production. TARP money given to capitalists? That is simply the profit of extortion. Grab capital and force the working class to the wall.

Oh. Don't get me wrong, Marx would have called Mao and Stalin closet capitalists too.

Nobody even studies Marx anymore, but he is the only one who saw this coming 160 years ago. And anyone who wants to talk about the efficiency of capitalism should write this on their bedroom wall: The US destroyed more wealth in this recession than the PRC and the USSR did in their entire histories, COMBINED. Goldman Sachs puts the Politburo to shame in the arena of wealth destruction.
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adaydreamApr. 17, 2010 - 11:13PM JST

This is a case of theft and conspiracy to earn the almighty buck. This isn't anything new. It's the rich stealing and hurting the little guys. These packages of mortgages were packaged together and those who might have been able to rework their loans couldn't because it was impossible to pull individual loans out and reworking them. Home owners couldn't find who owned their loans.

And if Sen. McConnell gets his way, these investment instruments will never be changed. He's been meeting with Wall Street and they have been crying the blues to him. He knows where his bread is buttered. < :-)
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BadseyApr. 17, 2010 - 11:32PM JST

This is being labeled as a "civil" case instead of a criminal case to get all the information and sweep it under the carpet. =Criminals pay a fine and keep attacking institutions and countries with fiat money. The populace should hold these financial terrorists responsible, but they are to weak and the media to strong. =Globalism.
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manfromamericaApr. 19, 2010 - 01:58PM JST

Interesting timing on this. Smells like a scam to push forward Obama's so-called "Wall Street reform" (i.e. government takeover).
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EgalityrannyApr. 21, 2010 - 11:06AM JST

Inconvenient Fact of the Day:

Campaign contributions from Goldman Sachs employees to President Obama's campaign totaled nearly seven times as much as what President Bush received from Enron workers.