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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, May 11, 2011

More Probing at the Goldman Sachs Scab

There are a lot of people who feel that Goldman Sachs needs antiseptic cleaning up. For example,

--Goldman Sachs is being accused by the Massachusetts Security Division of improperly passing tips to clients;
--Goldman Sachs is being investigated by the SEC and FINRA (Financial Industry Regulatory Authority) for communications and research practices;
--Goldman Sachs is accused by the CFTC of "aiding and abetting, civil fraud and supervision-related charges." Also see here.

Surely there are more accusations to come.

UPDATE 3-Regulators probe Goldman analyst communications
Regulators looking at analyst, staff, client discussions
. . . .
by Lauren Tara LaCapra - Reuters

NEW YORK, May 10 (Reuters) - Massachusetts securities regulators may charge Goldman Sachs Group Inc (GS.N) with improperly passing along analysts' tips to top clients.

The Massachusetts Securities Division is weighing administrative proceedings against the bank over communications among its analysts, sales staff and clients, according to Goldman's quarterly filing with U.S. regulators.

The U.S. Securities and Exchange Commission, Financial Industry Regulatory Authority and others are investigating similar matters, Goldman said. The investment bank said it is cooperating with the probes but did not provide more detail.

Goldman and its Wall Street peers are dealing with myriad regulatory probes in the wake of the financial crisis.

Massachusetts Secretary of State William Galvin, the state's top financial regulator, said in the past that he was investigating Goldman and had subpoenaed information about how the bank might have passed along short-term trading tips of its analysts to top clients.

In 2009, Galvin said he was concerned the analysts might pass along their best ideas improperly during weekly meetings called "huddles."

Galvin's office declined to comment on Tuesday, except to confirm the accuracy of Goldman's statements in its filing.

In 2003 Galvin was among a group of regulators who negotiated a $1.4 billion settlement over research practices of big Wall Street firms, including Goldman. Banks were accused of issuing overly optimistic research on companies to win their investment banking business.

A question now is whether Goldman is meeting the terms and spirit of that settlement. As part of the settlement, 10 Wall Street banks agreed to separate their research and banking businesses with a so-called "Chinese wall" to avoid conflicts of interest. Also, research analysts were prohibited from soliciting investment banking business, and their compensation was not to be based on performance of that division.

Goldman also said in its Tuesday filing that Commodity Futures Trading Commission staff had told the bank's execution and clearing unit that they will recommend the CFTC bring charges against the unit. The charges would be linked to Goldman's clearing trades for a broker-dealer.

Read the entire article here


Anonymous said...

To recap: Goldman, to get $1.2 billion in crap off its books, dumps a huge lot of deadly mortgages on its clients, lies about where that crap came from and claims it believes in the product even as it's betting $2 billion against it. When its victims try to run out of the burning house, Goldman stands in the doorway, blasts them all with gasoline before they can escape, and then has the balls to send a bill overcharging its victims for the pleasure of getting fried.

Anonymous said...

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it" - Frederic Bastiat.

Looks like old Frederic was right!

Anonymous said...

Asked point-blank if Goldman's huge "short" on mortgages was an intentional bet against the market or simply a "hedge" against potential losses, Birnbaum played dumb. "I do not know whether the shorts were a hedge," he said. But the committee, it turned out, already knew that Birnbaum had written a memo in which he had spelled out the truth: "The shorts were not a hedge." When Birnbaum's lawyers learned that their client's own words had been used against him, they hilariously sent an outraged letter complaining that Birnbaum didn't know the committee had his memo when he decided to dodge the question.

It wouldn't be hard for federal or state prosecutors to use the Levin report to make a criminal case against Goldman. I ask Eliot Spitzer what he would do if he were still attorney general and he saw the Levin report. "Once the steam stopped coming out of my ears, I'd be dropping so many subpoenas," he says. "And I would parse every potential inconsistency between the testimony they gave to Congress and the facts as we now understand them."

Anonymous said...

Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn't make a massive short bet and didn't bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a "big short" and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players

Joyce said...

Matt Taibbi is a national treasure!

Anonymous said...

Greece had 13 off-market deals with Goldman to hide debts

By Elisa Martinuzzi

Friday May 13 2011

Greece had 13 off-market derivative contracts with Goldman Sachs, most of which swapped Japanese yen into euro in a 2001 transaction aimed at concealing the true size of the nation's debt, according to the European Union's statistics office.

The amount borrowed through the swaps was due to be repaid with an interest-rate swap that would have spread payments through 2019, Eurostat said in a report yesterday. In 2005, the maturity was extended to 2037, the report said. Restructuring the swaps spread the cost over a longer period, leading to an increase in liabilities and debt, Eurostat said.

Repeated revisions of Greece's figures, beginning in 2009, spurred a surge in borrowing costs that pushed the country to the brink of default and triggered a region-wide debt crisis.

The use of off-market swaps, which Greece hadn't previously disclosed as debt, let the country increase borrowings by €5.3bn, Eurostat said in November.

Eurostat said most issues surrounding the swaps were resolved in September, when Greece agreed to correct its debt figures. (Bloomberg)

- Elisa Martinuzzi

Anonymous said...

As long as government is the ONLY party who can file charges, there
will be corruption and a thriving oligarchy to control government to
(1) prosecute enemies and (2) to prevent their own prosecution. We
have to understand the nature of the beast in order to prepare for the
future based upon simply what always unfolds under these
circumstances. This is the real driving force behind the shift from
PUBLIC to PRIVATE assets on the horizon.

bankers today have infiltrated government to such an extent, that we
have lost all sense of for the people by the people. It is now for the
oligarchy and by the oligarchy. This is why we are really screwed.

Anonymous said...

The People vs. Goldman Sachs

A Senate committee has laid out the evidence. Now the Justice
Department should bring criminal charges

They weren't murderers or anything; they had merely stolen more money
than most people can rationally conceive of, from their own customers,
in a few blinks of an eye. But then they went one step further. They
came to Washington, took an oath before Congress, and lied about it.

Anonymous said...

probe as in end of date?

Jezebels Undermining Financial Overhaul

That the sheeple tolerate does not mean they are dumb or foolish, but it does speak to the eradication of Democracy. The complete institutionalization of this process has created some angst, but an embedded policy of Bread & Circuses usually serves to distract the masses. We can throw the bums out every two years, but it matters little. A new set of bums merely push the buttons and pull the levers of the machinery — but it is the machine itself that has become so corrupted. To quote P. J. O’Rourke “Voting just encourages the Bastards.”

Today, we learn of more Republicans blocking appointments to all manner of regulatory oversight offices. Because, you know, bankers can self-regulate. And Democrats lack the balls to ram through someone like Paul Volcker to oversee the 5 years-olds we call bankers. They would not want to offend the overlords. Rule 1 in modern politics: Never upset the donors.

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