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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, May 13, 2011

The Erosion of Confidence in Goldman Sachs

There are many people becoming a bit leery of Goldman Sachs because of its eroding reputation. A few are listed:

--analysts at S&P Equity Research cut Goldman Sachs stock from buy to hold because of concerns over the risk of a lawsuit;
--the 650-page Senate report into the investigation of the financial crisis has been sent to the Department of Justice for further action;
--Matt Taibbi's new article analyzes Goldman Sachs's role in helping bring about the financial crisis as laid out in the Senate report;
--Richard Bove, an analyst at Rochdale Securities cut Goldman Sachs's rating to "sell" from "neutral;"
--The CFTC (Commodity Futures Trading Commission) recommends charges be filed against the bank's practices;
--the Justice Department is investigating Goldman's actions in the derivatives market in 2007;
--plus FINRA and Massachusetts State regulators are investigating GS as noted in an earlier post .

I wonder if Goldman Sachs's $3.4 billion set aside for lawsuits will be enough.

Here's How Eliot Spitzer Would Handle The Goldman Sachs Perjury Claims
By Katya Wachtel - Business Insider

What would Eliot Spitzer do if he were handed the Senate Subcomittee's report on what caused the financial crisis?

"Once the steam stopped coming out of my ears, I'd be dropping so many subpoenas," Spitzer told Taibbi in this month's Rolling Stone.

"And I would parse every potential inconsistency between the testimony they gave to Congress and the facts as we now understand them."

(Background: Some in the Senate believe that Goldman Sachs helped cause the financial crisis. After the Senators released their report on what caused the financial crisis (which revealed tons of sketchy activity among banks), they recommended that Goldman Sachs' execs be investigated to determine if any of them committed perjury during their testimony before the Senate last year.)

Taibbi then questioned which "inconsistencies jump out at him."

Spitzer hones in on Goldman's claim that it wasn't really shorting the market, when it was:

They keep claiming they were only marginally short, that it was more just servicing their clients. But it sure doesn't look like that. They were $13 billion short. That's big — 50 percent of their risk. It was so completely disproportionate.

On the Hill, according to the Taibbi's "The People vs. Goldman Sachs" Goldman Sachs employees testified that the weren't net short.

Spitzer added, "Why should Carl Levin be the one who needs to do this?" asks Spitzer. "Where's the SEC? Where are any of the regulatory bodies?"

Good question! The SEC is prosecuting insider traders. Like Raj Rajaratnam, a billionaire who was just found guilty.

Read the article here


Anonymous said...

The holders of wealth and entrepreneurs can see a crony system when it is front of them and they could see the rule of law being destroyed and the theft of the Wall Street banksters as clear as day. So what has happened since 2008? The fascist Federal Reserve has given all of America’s wealth to the Wall Street criminals on both the sell-side and also many on the buy-side who are ”playing ball” (you know who you are and you are a disgrace to investors the world over) and nothing good has happened except a destruction of what was left of the middle class.

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