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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, July 18, 2012

Goldman Sachs's Many, Many Failures

A class action suit by the Mississippi retirement fund against Goldman Sachs was settled by mediation:

 77. The investigation examined whether banks, including Goldman Sachs, engaged
in the following practices:
• Facilitated the origination of "unfair" loans under Massachusetts law;
• Failed to ascertain whether loans purchased from originators complied
with the originator's stated underwriting guidelines;
• Failed to take sufficient steps to avoid placing problem loans in
securitizafion pools;
• Been aware of allegedly unfair or problem loans;
• Failed to correct inaccurate information in securitization trustee reports
concerning repurchases of loans; and
• Failed to make available to potential investors certain information
concerning allegedly unfair or problem loans, including information
obtained during loan due diligence and the pre-securitization process, as
well as information concerning their practices in making repurchase
claims relating to loans both in and out of securitizations. 
(From the Second Amended Class Action Complaint for Violation...of the Securities Act of 1933 p. 28) 

Goldman Settles Class-Action Over $698 Million Offering
By Bob Van Voris and Patricia Hurtado - Bloomberg

Goldman Sachs Group Inc. (GS) reached a class settlement with investors in a $698 million mortgage- backed securities offering, a lawyer for the plaintiffs told a federal judge in New York.

David Wales, who represents the Public Employees’ Retirement System of Mississippi, told U.S. District Judge Harold Baer in a letter made public today that both sides had accepted a settlement proposed by a mediator. Details of the agreement weren’t disclosed.

Wales said the parties will file papers by July 31 asking Baer to approve the settlement.

The Mississippi retirement fund sued in 2009, claiming New Century Financial Corp. (CYFL), which originated the mortgages underlying the securities, failed to adhere to its underwriting standards and overstated the value of the collateral backing the loans. The fund claimed Goldman Sachs didn’t conduct proper due diligence when it bought the loans in 2005. 

Read the article here


jenniferbrace0 said...

I hope this class-action suit meant more people would get the hospice care they need. It's sad when retirement funds get compromised, and it's good to hear it didn't happen this time.

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