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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, May 2, 2012

Why Goldman Sachs Will Never Face Criminal Charges

For awhile many people thought that Eric Schneiderman, NY Attorney General, was going to aggressively pursue serious investigations of mortgage-backed securities.  Instead, he caved in to the government's wishes and became part of the foreclosure settlement with the banks in which banks will only pay a small sum and all the fraud will be overlooked.

None of the investigations or task forces is serious about prosecuting financial fraud for any bank or organization.

No wonder Goldman need never fear it will be criminally prosecuted for its mortgage-backed securities.

Rest easy, there will be no Pecora Commission for the 2008 Great Recession.

Memo to Schneiderman Mortgage Task Force:  When You are in a Hole, Quit Digging
By Yves Smith - Naked Capitalism

. . . .
But an even worse sign, the task force appears to be shunning assistance from that very sort of expert. One colleague reported that he has spoken to attorneys who said they were involved with the Schneiderman task force. He has argued that many of the SEC cases filed as civil suits, such as the Goldman and Citigroup CDO cases, could have been brought as criminal cases. Two months ago, they were very eager to speak with him. They’ve since gone radio silent.

Why? The excuse through the grapevine is that the failed Bear Stearns prosecutions show it’s just too hard to prevail on criminal charges. Bollocks. Those suits were badly conceived. The SEC relied on what it thought was decisive evidence in various e-mails. It failed to do enough discovery (critically, enough in the way of depositions of the targets) to find out that the e-mails didn’t necessarily tell the whole story. Those suits failed due to lazy, hasty preparation, and probably also to poor choice of target (the Bear Stearns funds were investors, and thus in many ways victims more than perps).

The real reason is that the Administration has absolutely no interest in pulling hard on the fraud thread and seeing what it unravels. This is an election year and the banks are one of the very biggest donor groups, second only to health care. Obama’s policy is not to look back, and Geithner last week repeated the official mantra that the banks were just hoist on their own petard. How convenient. From The Hill (hat tip Amanda):
Geithner took things a step further, suggesting that it was primarily human nature, not criminal actions, that caused the crisis.
“Rarely is an actual crime a material source of the damage. This is a tragic thing. I wish it were different,” he said. “You cannot legislate away stupidity and risk-taking and greed and recklessness.”
Funny how we don’t accept “human nature” as an excuse for wife-beating, illegal drug use, statutory rape, or embezzlement. But if you are powerful enough to have a Treasury secretary doing your PR, presumably any conduct goes. 
Read the whole article here 


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