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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Friday, April 10, 2009

AIG and Goldman Sachs Conflict of Interest

AIG head’s $3M in Goldman stock raises apparent conflict of interest

By Timothy P. Carney
Examiner Columnist 4/10/09

Edward Liddy, CEO of government-run AIG, still owns more than $3 million of stock in Goldman Sachs, which has pocketed $13 billion or more of the $170 billion federal officials have spent bailing out the ailing Wall Street insurance giant.

. . .

Liddy, according to an AIG spokeswoman, “views his role as CEO in essence as a public service.” Liddy has been charged, in effect, with protecting the unstable American economy and taking care of the taxpayers’ money.

. . .

As we saw with the political eruption over the bonuses his company paid out last month, Liddy needs government approval for his actions. The federal government owns 79.9% of AIG, and so Liddy, in effect, works for the government. In theory, then, Liddy works for the American people.

Yet he is not covered by the same ethics and financial disclosure rules that govern real government employees, specifically, conflict of interest rules don’t apply to him. Thus, Liddy observed in a recent Washington Post oped that “my annual salary is $1. My only stake is my reputation.”

But he has acute financial stake in one of AIG’s counterparties—namely, his $3.2 million personal investment in Goldman Sachs.

Liddy served on Goldman’s board of directors until September 2, 2008, when Treasury Secretary Hank Paulson called on him to take the reins at newly bailed-out AIG, now 80% owned by the federal government.

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Anonymous said...

The reason that Senator Judd Gregg, the most fiscally conservative member of the Senate, authored the TARP bailout of the banks, was that Gregg had millions of dollars invested in Bank of America stock.

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