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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

Sunday, December 12, 2010

Goldman Sachs--Wins Some, Loses Some

It is very strange to read about Goldman Sachs winning a case of "espionage" when an employee downloads code from its computers and, meanwhile, Goldman Sachs itself uses every opportunity to take advantage of other investors, including its clients (as in Abacus). There may be other strange things that Goldman Sachs did during the financial meltdown.

The article below juxtaposes two alleged cheating opportunities.
Former Goldman Programmer Guilty of Code Theft, Levin Still Probes
by Agustino Fontevecchia -

A high frequency trading developer looks at 10 years behind bars for stealing proprietary code.

Goldman Sachs may have finally caught a break from the constant heat it's been getting, as a jury in New York found former programmer Sergey Aleynikov guilty of stealing proprietary code used for high-frequency trading. It wasn't all cheers for Goldman, though, as an investigation carried on by Senator Carl Levin (D-MI) called the investment bank's CDS activities abusive.

Aleynikov, a 40-year old Russian immigrant, faces 10 years in prison after Judge Denise Cote read the verdict which found the former Goldman Sachs ( GS - news - people ) programmer guilty of stealing code used in high-frequency trading. Aleynikov was arrested over the fourth of July weekend in 2009 at Newark Liberty International Airport in Newark, N.J.

Federal agents accused Aleynikov of uploading Goldman's source code, a proprietary piece of information considered a trade secret, into a German server. Aleynikov was leaving the investment bank for Chicago start-up, Teza Technologies. The high-frequency trading firm reportedly offered Aleynikov $1.5 million in compensation, nearly three times as much as Goldman Sachs.

The programmer, who allegedly was to use the code to develop a trading platform at Teza, claimed he made a mistake as he was trying to download open source code. Aleynikov, who holds dual Russian-U.S. citizenship, was placed under home confinement and electronic monitoring, after he posted bail.

It wasn't time to uncork champagne bottles at Goldman Sachs. The firm headed by Lloyd Blankfeinwas being investigated by Senator Carl Levin for its credit default swap trading activities during the run-up to the market free-fall caused by Lehman Brothers ( LEHMQ - news - people )' collapse.

Emails from the head of Goldman Sachs' asset-backed securities trading desk, Michael Swenson, during the subprime mortgage crisis show that he urged his traders to "start killing the shorts in the street" and "cause maximum pain." Levin accused the investment bank of engaging in a so-called short-squeeze strategy, which would drive the markets in favor of Goldman.

Read the article here


Anonymous said...

Like they say each day we resemble Japan...everything is so conflicted and intertwined that we better learn this word! It describes our economy and leaders perfectly!

A keiretsu is a group of closely related Japanese companies, often with interlocking ownership. Traditionally, there have been both horizontal and vertical keiretsu. Horizontal keiretsu center on a main bank and their companies span various industries. Vertical keiretsu center on a major manufacturer, like Toyota, and include its various suppliers and wholesalers. The keiretsu encourage its members to award contracts to sister companies and cooperate with each other for the overall good of the keiretsu. The keiretsu dominated the Japanese economy in the last half of the twentieth century. More recently, however, the keiretsu have been losing their grip, and the long-term business relationships of the keiretsu are fraying. When written in Japanese, keiretsu comprises two characters, meaning "system" and "row". Thus the term keiretsu is now used more generally to mean an alliance of companies and individuals that work together for mutual benefit.

Anonymous said...

Secret Banking Derivative Cabal Redux

Of course, to anyone who has read Zero Hedge over the past two years none of this is a surprise. We have long claimed that:

* Derivatives trading is and continues to be the most profitable product line for the banking cabal, but for Goldman Sachs particularly, whose FICC group would be a pale image of itself if it could not dominate CDS trading (link)
* Goldman is a virtual monopoly in client-facing synthetic trading. Furthermore, it is a pure monopoly in cap arb situations that require the combination of cash and synthetic trades, courtesy of the elimination of the Bear fixed income trading unit (the bulk of which ended up going to Goldman) and the destruction of Lehman Brothers. And as virtually everything is now a pair trade in the basis realm of some sort, Goldman likely pockets, directly and indirectly, a few nickels of every single corporate spread trade in the world
* Due to pricing opacity, it is not unheard of, and in fact happens quite often, that due to wide entry spreads, both sides of a given CDS trade can claim a profit at the same time, especially with banking facilitiation that "validated" End Of Day/Week/Month pricing tables. This leads LPs to believe that their fund investment is in much better shape than in reality, leading to a Madoff type event one day when reality catches up.

Anonymous said...

Boy if it looks like keiretsu

and smells like keiretsu

maybe its keiretsu

sure seems like it..

Anonymous said...

Is this the reason for everyone's apathy? Hope not.

"One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the Bamboozle. We're no longer interested in finding out the truth. The Bamboozle has captured us. It is simply too painful to acknowledge - even to ourselves - that we've been so credulous."
-Carl Sagan

Anonymous said...

I wonder what GOD would do in this situation?

Banning Big Wall Street Bonuses Favored by 70% of Americans
More than 70 percent of Americans say big bonuses should be banned this year at Wall Street firms that took taxpayer bailouts, a Bloomberg National Poll shows.

An additional one in six favors slapping a 50 percent tax on bonuses exceeding $400,000. Just 7 percent of U.S. adults say bonuses are an appropriate incentive reflecting Wall Street’s return to financial health.

A large majority also want to tax Wall Street profits to reduce the federal budget deficit. A levy on financial services firms is the top choice among more than a dozen deficit-cutting options presented to respondents.

Anonymous said...

Subject: One Major Reason Why Americans are So Clueless

The book’s title is The Deliberate Dumbing Down of America.

Anonymous said...

Message to Ken Langone..

...the yankees never went to the government to overturn a lost game...please stop....everyone has only so much of a good reputation before it turns bad!

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