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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 9, 2011

Goldman Sachs's Continuing Legal Woes

Not only is Goldman Sachs feeling the losses from trading on 21 days of the third quarter of 2011 but it also is feeling the pinch from legal suits which may require $2.6 billion to settle. Wouldn't it be better to put these GS executives in jail for their "mistakes" where they would no doubt begin to think twice about breaking the laws and pushing the rules in order to make massive amounts of money?

How a bank can maintain the trust of its clients and customers with such a miserable track record is the great unknown query that apparently cannot be answered.

Goldman's 'Possible' Legal-Loss Tab: $2.6 Billion
By Liz Moyer - WSJ Markets

NEW YORK—Goldman Sachs Group Inc. raised its estimated "reasonably possible" legal losses stemming from various lawsuits and investigations to $2.6 billion as of the end of the third quarter, up from $2 billion at the end of June, according to its quarterly regulatory filing.

The filing provides 12 pages of details about new and continuing legal problems for Goldman, including additional and potential lawsuits related to mortgage-related securities it packaged and sold in the last few years. Goldman said it has $15.8 billion in aggregate notional amount of mortgage-related securities sold to parties that have sued for their money back.

Goldman said it has received civil investigative demands from the Department of Justice for information related to a previously disclosed investigation of credit-default swaps. The matter is similar to a probe launched earlier this year by the European Commission, which is looking into several banks in connection with the supply of data for credit-default swaps, including profit-sharing and fee arrangements for the clearing of credit-default swaps and the potential for anticompetitive practices.

Goldman also said in the filing it is subject to investigations and reviews by various unnamed government and regulatory groups over its investment-management services, and that it faces civil suits and arbitration proceedings involving disputes with clients related to losses allegedly incurred because of these services.

The firm said it is cooperating with the investigations and reviews.

Goldman added the Federal Housing Finance Agency (as conservator for Fannie Mae and Freddie Mac) and the National Credit Union Administration to a growing list of entities that have filed suit against it over mortgage securities.

See the continuing list of legal woes from the article here


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