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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

Thursday, November 25, 2010

Investigating Goldman Sachs

We don't know much about where the investigations of various financial firms are going but it gives one a sense that maybe someone (or a lot of people and perhaps Goldman Sachs itself) finally will be brought to justice for participating in and/or causing the global financial meltdown.

The article below comes from the Business Insider and is written by Katya Wachtel:

Goldman Sachs Employees Are Shocked By Wellington Subpoena And Scrambling For Information With Their Bosses Away For Thanksgiving

by Katya Wachtel - Business Insider, Clusterstock
Nov. 24, 2010

News that Wellington Management received an FBI subpoena yesterday got Goldman Sachs riled up for the first time since the massive insider trading investigation exploded on Monday.

Hedge funds are one thing - mammoth mutual fund companies with $598 billion AUM, that is another, a source at the company tells us.

"When you see Wellington - a straight down the line mutual fund - getting involved, you think, why are they implicated? What is going on?" our source said. "People here are more worried now. Janus, Wellington - that made people a bit nervous."

After all the fun of hedge-fund-raid Monday (Diamondback, Level Global, and Loch Capital were all ambushed by the feds), it came out yesterday that the Feds had also demanded documents from the mutual fund companies Wellington and Janus.

Later, SAC Capital and Citadel also admitted they'd been contacted by the FBI too.

The news is nerve-wracking for Goldman employees because the same Wall Street Journal article that predicted on Friday that the investigation involved "low-level" Goldman Sachs employees, had also warned that Wellington, Citadel and SAC are entangled in the drama.

So right now, the only prediction that hasn't (to the best of our knowledge) come true is that Goldman Sachs and Maverick, another hedge fund, will receive subpoenas.

No internal email has gone out at Goldman yet, and no meeting has been called to explain who is linked to the probe within the bank.

This is unusual, says our source. Employees are usually told about these incidents almost immediately, to make sure they toe the party line, as it were, in regard to whatever the latest scandal is.

But nothing on this.

"It's hard to get a real read of what's going on because a lot of the bosses are away for the holidays," our source said. "Or maybe they just don't think this is anything major."

Either way, after we broke the news yesterday that the bank is most likely embroiled in the scandal because of Diamondback, Charlie Gasparino announced that he'd heard the same thing from more sources at Goldman. He said yesterday evening that the connection between Goldman Sachs and the investigation, is Diamondback, and "likely involves potential leaks from a Goldman Sachs investment banker and French banker."

"It makes sense for it to be in the investment banking division, because they have access to material non-public information when they're putting deals together," our source said. "Considering this has become a bit of witch hunt, it may just be couple of junior guys who sent a couple of bad emails."

So, we wait.

Read the article and reader comments here


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