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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

Thursday, August 23, 2012

Goldman Sachs Is Sued Again

It is strange how Goldman Sachs is characterized as overstating the quality of loans in mortgage backed securities when, euphemistically speaking, "overstated" really should be called fraud.  These little niceties of language make Goldman appear like a curmudgeonly old grandfather who totters off his crutches and falls a bit but nothing to worry about.

Overstating the quality of loans is called fraud, Fraud, FRAUD;  untrue statements are lies; breaching the law is committing illegal acts.   "Complaints" are sounds children make when they stub their toes.  Language used in lawsuits is part of the way that fraud has become decriminalized.

FDIC Sues Goldman, JP Morgan Over Mortgage-Backed Securities
By Andrew Harris - Bloomberg Businessweek

Goldman Sachs & Co. and units of JPMorgan Chase & Co. (JPM) and Ally Financial Inc. overstated the quality of loans underlying mortgage-backed securities they sold to the failed Guaranty Bank in Austin, Texas, according to lawsuits brought by the FDIC as its receiver. 

In three separate complaints filed in state court in Austin on Aug. 17, the Federal Deposit Insurance Corp. alleged those institutions and others sold about $5.4 billion worth of certificates to Guaranty Bank.

“The defendants made numerous statements of material fact about the certificates and, in particular, about the credit quality of the mortgage loans that backed them,” according to each of the FDIC complaints. “Many of those statements were untrue.” 

Read the article here


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