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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

Wednesday, January 26, 2011

At Last, Someone is Asking the Hard Questions of Goldman Sachs and Not Just Taking the Money

The questions below are just some of the ones that every organization that deals with Goldman Sachs should ask itself. There are plenty more questions to ask Goldman Sachs but this is a beginning.

Dr. Dyer-Witheford of the Richard Ivey School of Business asked the right questions.

Goldman Sachs scholarship challenged at Senate
January 24, 2011 @ admin

A controversial MBA scholarship has been introduced at Western. As it sits now, the Goldman Sachs Scholars Fund MBA Award (School of Graduate and Postdoctoral Studies, Business) is under review by the Senate Committee on Academic Planning and Awards (SCAPA). It is under review because Dr. Nick Dyer-Witheford, Associate Dean and Associate Professor in the Faculty of Information and Media Studies (FIMS), raised concerns at the past SCAPA meeting about UWO receiving money from an organization such as Goldman Sachs.

Below is a copy of the questions Dr. Dyer-Witheford presented to SCAPA to supplement his concerns. A couple questions need to be asked in regard to this donation, starting with who approached who, and when?

This matter is currently under review by SCAPA as well as the Vice-President External Kevin Goldthorp, and a report to Senate will be made next month about whether this donation will exist come May 2011.

Read the rest of the article here

Goldman Sachs Questions

The article is available here


Anonymous said...

The wrong kind of sharing: Mark Zuckerberg's Facebook page hacked

Mark Zuckerberg's Facebook page has been hacked by an unknown person who posted a status update suggesting that the site should let people invest in it rather than going to the banks.

The page belonging to the 26-year-old Zuckerberg, the Facebook founder who was named Time's Man of the Year in 2010, was hacked some time on Tuesday.

The message left by the hacker read: ""Let the hacking begin: If facebook needs money, instead of going to the banks, why doesn't Facebook let its users invest in Facebook in a social way? Why not transform Facebook into a 'social business' the way Nobel Prize winner Muhammad Yunus described it? What do you think? #hackercup2011".

Anonymous said...

‘The stock market is for suckers’

Only that’s not how things have unfolded. In its email to clients, Goldman wasn’t talking about a public stock offering for Facebook. Instead, the bank, along with a Russian investment firm, injected US$500 million into Facebook’s coffers by way of a purely private transaction. Goldman, in turn, set up a fund through which wealthy clients could own those Facebook shares themselves, for a minimum of US$2 million. Based on that valuation, Facebook emerged a colossus worth more than US$50 billion.

Since the deal first made headlines, Goldman has had to backtrack somewhat, due to “intense media coverage.” Regulators were cool to the optics of rich Americans gaining access to hot companies when their less wealthy countrymen were shut out. So last week the investment bank made membership to its Facebook fund more exclusive still. Now only rich foreigners will be invited in.

The stealth arrangement is just the latest sign something is very wrong with Wall Street. The stock market has become dangerously disconnected from its primary function of uniting growing businesses with large numbers of long-term investors. Part of that disconnect can be seen in the growth of a so-called “second market” for private companies­—like Facebook—off limits to all but the wealthy. But there’s more. Markets have come to be dominated by myopic short-term thinking. The vast bulk of trades now involve no humans at all, but rather sophisticated computer programs that swap stocks at lightning speed; many believe so-called high-frequency trading was one of the causes of the flash crash last year that exposed how fragile the whole game has become. And as more Americans have tied their savings to the market, regulators have sought to protect them with layers of rules and red tape that critics say is driving away public companies.

There’s a much darker side to all this stealth trading in private company shares, argues Cuban. “We are seeing people who are trying to game the system,” Cuban told Maclean’s in an email interview. “The expectation is that [a company] will go public at a significant premium and the secondary market is a way to ‘get in on the IPO’ at a lower cost.” After all, for rich investors who snap up Facebook shares by way of the Goldman Sachs deal or through SharesPost and SecondMarket, the ultimate way to profit will be for Facebook to go public. By then, though, the value of the shares will have been bid up, and much of the company’s best growth may be behind it. The very real risk is public stock market investors could be left with an overpriced heap.

Anonymous said...

Excellent review!

Obama's Speech and America, Inc.

There was a massive pink elephant in the room called reality though. So, when he waxed proud when he said, "We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing." I had a different reaction.

"The rules have changed," said Obama.

Yes, they certainly have. Businesses can offshore jobs because it is in their best profit and shareholder and stock value interest to do so, with no federal incentive to alter this strategy - that's why corporate profits and CEO salaries are up, whereas the average median employee salary on a comparative basis is stuck somewhere in the 1970s. That's why staring at the abyss of potential bankruptcy in the fall of 2008, Goldman Sachs and Morgan Stanley got the Fed's blessing to become federally subsidized bank holding companies. And we, taxpayers, are still on the hook for the Fed's $29 billion of backing of Bear Stearn's assets taken over by JPM Chase in a government sponsored merger in the Spring of 2008 and coming with a bunch of still-being-wrangled lawsuits, not to mention gleeful federally backing of the further consolidation of the banking system to fewer, more powerful, more obtuse, more risky players.

Anonymous said...

At Davos, Era of Contrition for Bankers May Be Ending

At one of the opening panels on Wednesday, top executives from Goldman Sachs and Standard Chartered warned that new restrictions on their businesses are either irrelevant or threaten to hurt economic growth.

That is an argument bankers have been making for a long time, but the tone of the off-the-record session seemed more confident and less contrite than in recent years.

Anonymous said...

FCIC Finds Majority Of Revenues In Goldman's Most Profitable FICC Division Came From Derivatives

Frequent readers know that when it comes to Goldman Sachs, Zero Hedge has consistently claimed two things: i) that in the peak bubble days, the firm regularly commingled flow and prop traders on its trading floor(s), thereby allowing prop traders to either front run the firm's flow accounts, or trade alongside them in real time; and ii) that when it comes to OTC derivative trading, Goldman Sachs is the de facto Wall Street monopoly, a status made even more acute following the annihilation of Bear and Lehman, thereby cementing the firm's undisputed role as primary fixed income/OTC derivative market maker. Whereas yesterday we received indirect confirmation of the former, when we learned that Merrill was slapped on the hand with a token $10 million fine for doing precisely what we alleged, and which we are certain will soon be reconfirmed transpired at all other major banks in the 2003-2007 period, Goldman most certainly, and probably profitably, included, tomorrow it will be made clear that Goldman was an effective monopolist within the derivative space, with a bulk of its revenues in its highest margin, FICC group, coming from derivatives. When tomorrow the FCIC releases its long-awaited 545-page report exposing a tiny fraction of the criminality on Wall Street, we will discover that "Derivatives accounted for 70 percent to 75 percent of revenue in the firm’s commodities business from 2006 to 2009, and “half or more” of revenue from interest rates and currencies, the firm estimated, according to a report by the Financial Crisis Inquiry Commission. From May 2007 to November 2008, about 86 percent of $155 billion in trades made by the firm’s mortgage business involved derivatives, the FCIC said."

In other words, derivatives have long been the driver behind the bulk of the revenue of the firm's most profitable group, in a time when the banking lobby (read Goldman) does everything in its power to prevent the collapse of OTC trading margins, and thus compromise the firm's second to none monopolistic position in the space. We are confident that when the FCIC report is released tomorrow, much more information on Goldman's activities will be gleaned.

No republican on the commission supported the findings.

Joyce said...

Re: "the stock market is for suckers" states in the last line that we should put our money in the banks. Well, I'm not sure that is the solution--better the credit union (who have higher rates of return too.)

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