More Probing at the Goldman Sachs Scab

There are a lot of people who feel that Goldman Sachs needs antiseptic cleaning up. For example,

--Goldman Sachs is being accused by the Massachusetts Security Division of improperly passing tips to clients;
--Goldman Sachs is being investigated by the SEC and FINRA (Financial Industry Regulatory Authority) for communications and research practices;
--Goldman Sachs is accused by the CFTC of "aiding and abetting, civil fraud and supervision-related charges." Also see here.

Surely there are more accusations to come.

UPDATE 3-Regulators probe Goldman analyst communications
Regulators looking at analyst, staff, client discussions
. . . .
by Lauren Tara LaCapra - Reuters

NEW YORK, May 10 (Reuters) - Massachusetts securities regulators may charge Goldman Sachs Group Inc (GS.N) with improperly passing along analysts' tips to top clients.

The Massachusetts Securities Division is weighing administrative proceedings against the bank over communications among its analysts, sales staff and clients, according to Goldman's quarterly filing with U.S. regulators.

The U.S. Securities and Exchange Commission, Financial Industry Regulatory Authority and others are investigating similar matters, Goldman said. The investment bank said it is cooperating with the probes but did not provide more detail.

Goldman and its Wall Street peers are dealing with myriad regulatory probes in the wake of the financial crisis.

Massachusetts Secretary of State William Galvin, the state's top financial regulator, said in the past that he was investigating Goldman and had subpoenaed information about how the bank might have passed along short-term trading tips of its analysts to top clients.

In 2009, Galvin said he was concerned the analysts might pass along their best ideas improperly during weekly meetings called "huddles."

Galvin's office declined to comment on Tuesday, except to confirm the accuracy of Goldman's statements in its filing.

In 2003 Galvin was among a group of regulators who negotiated a $1.4 billion settlement over research practices of big Wall Street firms, including Goldman. Banks were accused of issuing overly optimistic research on companies to win their investment banking business.

A question now is whether Goldman is meeting the terms and spirit of that settlement. As part of the settlement, 10 Wall Street banks agreed to separate their research and banking businesses with a so-called "Chinese wall" to avoid conflicts of interest. Also, research analysts were prohibited from soliciting investment banking business, and their compensation was not to be based on performance of that division.

Goldman also said in its Tuesday filing that Commodity Futures Trading Commission staff had told the bank's execution and clearing unit that they will recommend the CFTC bring charges against the unit. The charges would be linked to Goldman's clearing trades for a broker-dealer.

Read the entire article here

Yves Smith - Financial Advisor and Former Goldman Sachs Employee

 Yves Smith has written quite a bit on the financial crisis.  She has experience on Wall Street, Banking and writing as her bio below will show.  To more fully inform you, our reader, I felt it important to share with you some of her published articles in which she educates and informs us.  Her current blog, Naked Capitalism is one I feel you should bookmark.

Yves Smith Bio:

Yves Smith has written the popular and trenchant financial blog "Naked Capitalism" since 2006
Yves has spent more than 25 years in the financial services industry and currently heads Aurora Advisors, a New York-based management consulting firm specializing in corporate finance advisory and financial services. Prior experience includes Goldman Sachs (in corporate finance) (emphasis added), McKinsey & Co., and Sumitomo Bank (as head of mergers and acquisitions). Yves has written for publications in the United States and Australia, including The New York Times, The Christian Science Monitor, Slate, The Conference Board Review, Institutional Investor, The Daily Deal and the Australian Financial Review.[Yves is a graduate of Harvard College and Harvard Business School.

Links to interesting articles she has penned both recent and not so recent but still relevant.  A good refresher course of points that need to be remembered for actions that need to be taken.

As appeared in The Huffington Post:

Time to Investigate Lloyd Blankfein and Hank Paulson
Posted June 30, 2010 | 04:41 AM (EST)

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The New York Times has unearthed a damning tidbit about the bailout of AIG:

When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks -- including...
Read Post

Rahm Emanuel and Magnetar Capital: The Definition of Compromised
Posted April 13, 2010 | 01:22 PM (EST)

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Magnetar:

1. A neutron star with an intense magnetic field, capable of emitting toxic radiation across galaxies
2. A hedge fund, the single market player most responsible for the severity of the 2008 financial crisis, through the toxic instruments it created

Rahm Emanuel:
White House Chief of Staff
Politician selected by...
Read Post

Debunking Michael Lewis' The Big Short
Posted March 25, 2010 | 12:30 AM (EST)

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The current number one non-fiction best seller, Michael Lewis' The Big Short: Inside the Doomsday Machine, addresses the question "Who got it right? Who saw the real estate market for the black hole it would become, and eventually made billions from that perception?" It is hailed as meeting the usual...
Read Post

SEC, Fed Alerted By Merrill of Lehman Balance Sheet Games in March 2008
Posted March 18, 2010 | 08:58 PM (EST)

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So which theory is it: stunning bureaucratic incompetence, wishful thinking and denial, or a cover up? Or a combination of the above?
No matter which theory or theories you subscribe to, the continuing revelations of how the SEC -- and perhaps more importantly, the New York Fed -- conducted themselves...
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NY Fed Under Geithner Implicated in Lehman Accounting Fraud Allegation
Posted March 11, 2010 | 10:46 PM (EST)

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Quite a few observers, including this blogger, have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. Despite the bankruptcy administrator's effort to blame the gaping hole in Lehman's balance sheet on its disorderly collapse, the idea that the firm, which...
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Why No Regulatory Action on Banksters' "Destabilize the Markets" Threats?
Posted March 1, 2010 | 04:54 AM (EST)

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We have pointed out more than once that a major impediment to reform of the financial services industry is that a small number of firms control infrastructure crucial to modern capitalism:

1. Credit is essential to any society beyond the barter stage 2. Debt markets are now at...
Read Post

Schwarzman Says Kowtow to Banks or They Will Strangle the Economy
Posted February 12, 2010 | 05:56 AM (EST)

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Can someone shut these banking industry narcissists up?
The one and only time I met Steve Schwarzman was in 1986, when he and Pete Peterson had just started the Blackstone Group. I was a manager (meaning a mid level working oar) at McKinsey. We had teed up a deal...

Read Post

AIG Scandal: Fed as Chump or Fed as Crony?
Posted January 28, 2010 | 06:07 PM (EST)

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No matter which way you look at it, the picture that is emerging of the Federal Reserve, as revealed by the ongoing probes into its AIG bailout, is singularly unflattering.
The explanations for its actions can only support one of two interpretations: that the Fed was a chump, taken...
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Yves take on NYT's Joe Nocera's recent article:

NYT’s Joe Nocera Defends Failure to Bring Wall Street Execs to Justice
Saturday, February 26, 2011

Aargh, it is frustrating to see how quickly establishment-serving shallow arguments become conventional wisdom. We get a big dose of this line of thinking from the New York Times’ Joe Nocera in an article titled, “Biggest Fish Face Little Risk of Being Caught.”
Read Post

... A brief moment
I hope you enjoy her writings and most importantly the points and truths she makes.  Maybe if we repeat some of these points over and over again, maybe, just maybe someone up there in our political pool of toxic energy might begin to notice and do something about it.  Well, possible but not probable.  I guess therein lies the problem.  We not only have a financial crisis but a political one as well.  A two class system in a third world nation where the upper class rules free of any consequences and the rest of the population - weakened by fear - has no choice but to accept what is and suffer along.  The American Dream has faded.  It will turn into the American Nightmare.  I believe if we study history and other depressive societies we will see many similarities.  If we study what was and teach it to our children perhaps down the road a piece, our children will know enough to take charge and resurrect  "The Dream" so that their children will once again see America as it once was providing opportunity for all and most important providing "Liberty and Justice For All".

Related articles

• Yves Smith: Senator Levin Claims Goldman Execs Perjured Themselves Before Congress (delong.typepad.com)