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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, August 27, 2011

Can Goldman Sachs Learn A Lesson or Two?

Because the Department of Justice seems reluctant to investigate Goldman Sachs in order to lay criminal charges against its fraudulent behavior (creating CDOs, having them rated highly when they are just junk and then selling them to unwitting investors thus helping to cause a financial crisis), we have to rely on individuals and other groups to sue Goldman Sachs for its bad behavior. It seems that Goldman can commit perjury, bet against mortgage securities that they knew were junk when they sold them and continue on its merry way without acknowledging anything but a "mistake."

If Goldman Sachs acted ethically and honestly the bank wouldn't have to deal with so many charges and pay so many fines! A little time in jail might catch their attention!

Factbox: Goldman faces myriad legal challenges
By Andrea Shalal-Esa - Reuters

. . . .

Among the legal issues currently facing the bank are:

-- A Justice Department investigation launched after the Senate's Permanent Subcommittee on Investigations referred its 640-page report on the financial crisis, which included a large section on Goldman's handling of mortgage-backed securities. The panel's chairman, Senator Carl Levin, said Goldman and its executives misled investors and Congress, but said it was up to federal prosecutors to determine if any crimes were committed.

Goldman has said it disagreed with many of the report's conclusions but took seriously the issues addressed.

One deal involving collateralized debt obligations (CDOs) marketed as "Hudson," may provide prosecutors with the most compelling case for possible criminal or civil charges, according to two sources familiar with the matter.

-- In June, New York city prosecutors subpoenaed the bank to explain its actions in the run-up to the financial crisis. The Manhattan district attorney, Cyrus Vance, is not seeking new documents, according to one source, but wants to ask further questions about the information in the Levin report.

-- New York Attorney General Eric Schneiderman is investigating Goldman as part of a broader probe into the mortgage operations and securitization practices of seven banks. Schneiderman was removed Tuesday from the committee negotiating a nationwide foreclosure settlement with U.S. banks after he objected to a ban on further investigation of fraudulent business practices as part of the settlement.

-- The Securities and Exchange Commission is also investigating Goldman's handling of mortgage-backed securities deals. When the SEC settled its case with Goldman last year, it expressly noted that that did not preclude further actions. One source said the SEC viewed the case as a continuing priority.

-- In May, Goldman said the Commodities Futures Trading Commission was investigating its role as a clearing broker for an unnamed SEC registered broker-dealer. The CFTC advised the bank that it intends to bring aiding and abetting, civil fraud and supervision related charges against Goldman, related to its clearing services for the broker-dealer, Goldman said.

-- The Justice Department is also reviewing matters similar to a European Commission investigation initiated last month into the supply of data related to credit default swaps and fee arrangements for clearing of credit default swaps, including potential anti-competitive practices, the filing said.

-- This month, Goldman said the SEC was investigating the bank's compliance with the U.S. Foreign Corrupt Practices Act, a case linked to Goldman's dealings with Libya's sovereign wealth fund, according to the Wall Street Journal.

Read the entire article here


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