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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

Saturday, June 4, 2011

Justice Deferred for Goldman Sachs is Justice Denied the People

Goldman Sachs is under a lot of scrutiny right now. But does that mean anything? There are articles that feel Goldman Sachs will finally have to answer for its fraudulent behavior in its actions during the financial crisis and then there are the apologists that feel Goldman Sachs is just having a bad hair day as shown here.

The justice system seems to parse justice into civil (less severe) and criminal (more severe) bad behavior which allows for prosecution on two levels so that justice seems to be done (civilly) and yet does not penalize the individuals who are responsible for the unethical (criminal) behavior that brought about the fraud. Is Goldman Sachs's intent to make money at all costs lost on the justice system?

Another part of the problem is the way the justice system is approaching Goldman Sachs: there are innumerable people hassling the firm in what appears to be an uncoordinated way--the SEC, FINRA, an Attorney General, a District Attorney, the CFTC, the Department of Justice and so on. The force of each separate body takes away from the focus of the investigation. What perhaps is needed is one very strong body of attorneys who devote their entire time to pursuing Goldman Sachs until they make a criminal case for prosecution. All this dilly-dallying with different ways and purposes dilutes the whole process of justice.

The only satisfaction that the average person who lost his/her pension or savings because of the financial meltdown is that there will be a certain amount of attention paid to Goldman Sachs from various investigating and prosecutorial bodies who will worry Goldman Sachs like a dog worries a bone. The result appears to be small satisfaction for the afflicted and total mitigation for bad banks like Goldman Sachs.

Goldman Said to Get Subpoena Over Its Role in Crisis

By Andrew Ross Sorkin and Susanne Craig - DealBook

The bad news just keeps coming for Goldman Sachs.

The Wall Street investment bank has received a subpoena from the office of the Manhattan district attorney, which is investigating Goldman’s role in the financial crisis, said one person familiar with the subpoena.

It comes amid increased enforcement scrutiny of the company, which has faced blistering criticism that it shorted — or bet against — the mortgage market before it collapsed and that it knowingly sold bundles of bad mortgages to its clients. Goldman denies these accusations.

The inquiry stems from a 650-page Senate report from the Permanent Subcommittee on Investigations that indicated Goldman had misled clients and Congress about its practices related to mortgage-linked securities.

Senator Carl Levin, Democrat of Michigan, who led the Congressional inquiry, had sent his findings to the Justice Department to figure out whether executives broke the law. The agency said it was reviewing the report.

The subpoena means several government agencies may be running parallel, and possibly competing, investigations. The subpoena arrived Friday and is limited to ground covered in the Senate report, said the person familiar with it, who was not authorized to speak on the record. Subpoenas are requests for information and do not necessarily mean charges against Goldman or individuals at the company are inevitable.

Still, the development of a subpoena from the Manhattan district attorney, Cyrus R. Vance Jr., did not seem to surprise investors.

“This news is not unexpected,” Christopher Maimone, an analyst at Standard & Poor’s Equity Research, wrote in a note to clients, explaining that Senator Levin’s referral had made continued investigations a near certainty.

Still, shares of Goldman fell $1.79, or 1.3 percent, to close at $134.38, though earlier in the day, before investors digested the news, its shares fell as much as 3.5 percent. Goldman shares traded above $170 at the beginning of the year.

Goldman’s chief executive, Lloyd C. Blankfein, who has run the company since 2006, has privately told people recently that he has no plans to leave the company and wants to see it through this difficult period. Still, the recent subpoenas are sure to resurrect calls for a change at the top.

“You would have to think that the more these types of headlines persist, the greater pressure there will be for change,” said William Tanona, an analyst at the investment bank UBS. He has previously worked at Goldman Sachs.

Whatever the outcome of the investigations, investors do not expect Goldman itself to be indicted. No firm has ever survived such a blow. E. F. Hutton & Company and Drexel Burnham Lambert collapsed after being indicted in the 1980s before the cases even went to trial.

Brad Hintz, an analyst at Sanford C. Bernstein & Company, said in a note to investors on Tuesday that he believed that the government might seek to reach a settlement with Goldman.

“In a worst case environment, we would expect a ‘too big to fail’ bank such as Goldman to be offered a deferred-prosecution agreement, pay a significant fine and submit to a federal monitor in lieu of a criminal charge,” he wrote.

The subpoena came almost two weeks after lawyers for Goldman Sachs met with the office of the attorney general of New York for an “exploratory” meeting about the Senate report, the people said.

In a statement, Goldman Sachs said: “We don’t comment on specific regulatory or legal issues, but subpoenas are a normal part of the information request process and, of course, when we receive them we cooperate fully.”

Read the entire article here

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Coffee Says Subpoena of Goldman Sachs was Unexpected

See the video here


Anonymous said...

Honestly.... do you guys really believe there is a body of law...that applies to TBTF?

Aside:..I'm not a fan of John Edwards but look at how fast he was indicted...look at the focus in the media....and for what in the scheme of things?

This article gives you a flavor for what we are up against. The people have no representation...government and big business have merged!

Michael Hudson: Replacing Economic Democracy with Financial Oligarchy

The moral is that when it comes to bailing out bankers, rules are ignored – in order to serve the “higher justice” of saving banks and their high-finance counterparties from taking a loss. This is quite a contrast compared to IMF policy toward labor and “taxpayers.” The class war is back in business – with a vengeance, and bankers are the winners this time around.

Finance is a form of warfare. Like military conquest, its aim is to gain control of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentrating social as well as economic planning in centralized hands. This is what now is being done by financial means, without the cost to the aggressor of fielding an army. But the economies under attacked may be devastated as deeply by financial stringency as by military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight.

Like any monopoly or vested interest, the financial strategy seeks to block government power to regulate or tax it. From the financial vantage point, the ideal function of government is to enhance and protect finance capital and “the miracle of compound interest” that keeps fortunes multiplying exponentially, faster than the economy can grow, until they eat into the economic substance and do to the economy what predatory creditors and rentiers did to the Roman Empire.
If this is not war, what is?

Its a war alright...and the people collectively are losing!

Anonymous said...

Joyce said...

Both of the above links are really worth reading. They put things in perspective although they are not particularly optimistic.

Anonymous said...

Too Big to Fail or Too Stupid to Stop - Screw banks/not people

In the United States, that mantra can be extended to include appointed officials, like Treasury Secretary, Tim Geithner (still not admitting our record debt increase came directly from the $4 trillion worth of Treasury issuance and other forms of assistance extended to our banking system since late 2008, as we endure his stomach-churning 'show-begging' to the GOP for a debt cap raise) and Fed Chairman, Ben Bernanke (ditto). It also, of course, applies to congress people whose political survival depends on corporate and bank contributions and financial support, the ones that believe the Dodd-Frank bill changes anything.

Rather than considering how governments have systematically done, and continue to do, the wrong (as in immoral, unfair, and uneconomically sound) thing by trying to preserve banks, any politicians possessing the ability to think independently (an oxymoron, I know) should be asking themselves instead, how clever they could be about closing them down. Take a cue from Iceland.

The better plan would be to disband the Too Stupid to Stop mentality. Screw the banks. Sadly, it's a self-fullfilling downward spiral of incompetence - in Greece, Ireland, Portgual, Spain, Italy, and the United States where the Fed is gearing up for some verison of QE3 in the wake, ironically, of Euro-pay-the-banks, indenture-the-citizens, chaos. the comments

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