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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, November 16, 2011

Euphemistically Speaking, Goldman Sachs. . . .

The following summary gives another perspective on today's article below.

After investigating Goldman Sachs, the Florida Office of Financial Regulation has issued a "settlement agreement" of $20 million and a fine of $1.75 million which Goldman will take from its $2.6 billion set aside for legal matters. That's a small payment for Goldmanite chicanery. The investments sound more like a hoax than a mere misrepresentation of the securities.

The so-called liquid investments were deceptions; security of the investment proved false; and Goldman was "wrong" in perpetrating a criminogenic banking environment in which to play their games. Their misrepresentations were frauds. Having to buy back their investments shows the deceitful nature of the bank. The "hard work" of regulators seems like goldbricking when Goldman sets aside billions in anticipation of having to pay fines for so-called "misrepresentation" of investments.

Goldman Sachs will never have an incentive to mend its ways until the top executives spend some quality time in a jail for being dishonest and full of guile in their business dealings.

Society needs protection from such banks and bankers.
State orders Goldman Sachs to repay investors for misleading sales tactics
By Mary Ellen Klas - Naked Politics in the Miami Herald

Florida's securities regulators announced a settlement agreement with Goldman, Sach & Co. that has required the investment firm to back back an estimate $20 million in so-called "auction rate securities" because the company claimed they were liquid and secure when they were not.

From the OFR press release:

The Florida Office of Financial Regulation (OFR) today announced that OFR Commissioner Tom Grady has issued a settlement agreement resulting from an investigation of Goldman, Sachs & Co. (“Goldman Sachs”). The investigation revealed that Goldman Sachs misled Floridians by claiming certain types of investments called “auction rate securities” were secure, liquid investments, when in fact, they were not. “Goldman Sachs was wrong and OFR regulators will not tolerate such games that toy with consumers’ hard-earned money,” said OFR Commissioner Tom Grady.

“We’re happy to report that billions have been returned to investors’ pockets…where it belongs. This is a win for consumers and a win for Florida.” Goldman Sachs misrepresented the securities as though they were similar to cash, and that they were a suitable alternative for cash management purposes. In fact, they were a very different animal – they were not liquid, and they were very different from cash and money market funds. As a result of the agreement, the OFR ordered Goldman Sachs to contact eligible investors and offer to buy back auction rate securities that Goldman Sachs sold on or before February 11, 2008, and later became illiquid when the market for auction rate securities froze.

Goldman Sachs offered 100-percent refunds for certain consumers who originally used these auction rate securities investment vehicles. Some of those customers were eligible for an immediate buy back; regulators estimate that buy back cost to be more than $20 million for Floridians. In Florida, we are moving in the right direction. We are leading the nation in job creation and in building trust and confidence. The proof is in the pudding. More than $61 billion has been paid to investors all over the United States over the past three years, thanks to the hard work of state securities regulators.

Read the article here


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