These judgements tell us that Goldman Sachs can get away with fraudulent behavior and no Goldman Sachs executives will ever be prosecuted for their accounting control fraud. Corruption has crept into all the crooks and crannies of the system, it seems.
When trying to understand how Goldman Sachs can be judged as not having committed fraud or not having engaged in misrepresentation of its products, one of which is called Davis Square VI, you wonder whether there will ever be justice. The old canard that the buyer was "a sophisticated investor" should not be brought out as a defense because it sounds like the defense that Goldman Sachs uses for itself.
The SFGate article by Bob Van Voris tells us that the lawsuit brought against Goldman by Landesbank Baden-Wuerttemberg over CDO losses has been dismissed by Judge Pauley:
"Pauley said about 79 percent of the mortgages underlying Davis Square were below prime and at an increased risk of default. He ruled that LBBW failed to allege specific facts to support its claims for fraud and unjust enrichment. He also said the bank was a sophisticated investor that accepted the risks of its investment." (SFGate)Others, such as Janet Tavakoli, have found Goldman Sachs wanting. In a Business Insider piece, she discusses the CDOs that GS created and it is not a pretty picture. You may want to follow the links in her article including from the excerpt below:
"The German bank makes an excellent point. The portfolio backing Davis Square VI before the September 2008 initial taxpayer bailout of AIG, can be found on my web site via this link: Davis Square VI."The other disappointing judgement regarding Goldman Sachs is described in News Daily by Jonathan Stempel. The Board of Directors of Goldman Sachs "has won a dismissal of a lawsuit seeking to recover billions of dollars of bonus payouts and other compensation awarded for 2009." The shareholder who brought the suit is the Central Laborers' Pension Fund. The suit could be seen as infighting within the company, but, still, justice seems thwarted:
"In his ruling, Justice Bernard Fried dismissed the lawsuit with prejudice, saying the allegations 'do not provide any basis for the conclusion that the board acted for any purpose other than the advancement of the company's interests.'"But that is the whole point!! The advancement of the company's interests was Goldman's sole purpose: it is their quest for money at the expense of anyone else that makes Goldman Sachs what it is. And this judge gives that excuse as ample reason for Goldman Sachs not to share in the profits it gained through its fraudulent maneuverings. Wow! Who can beat that defense?