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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

Monday, August 27, 2012

Goldman Sachs Knows How to Profit from Its Conflicts of Interest

Here's another article about how Goldman Sachs uses conflicts of interest to feather its own nest.  Goldman advised Amerigroup, a health insurer, to accept an offer by WellPoint to acquire the company.  The shareholders who sued allege Goldman discouraged an offer by another company that might have been better for the shareholders but which benefited Goldman for sure.
Shareholders sue insurer Amerigroup
By Jeff Mordock - The Legal Intelligencer (Post-Gazette) 
. . . .
The plaintiffs allege that Goldman was "hopelessly conflicted" on the transaction because under its agreement with Amerigroup it would receive $233.7 million if the company were sold prior to Aug. 13.
Amerigroup is the 22nd-largest health insurer in the U.S., by premiums collected, according to the National Association of Health Insurers. WellPoint is the second-largest.

The shareholders -- the City of Monroe Employees Retirement System and the Louisiana Municipal Police Employees Retirement System -- filed the lawsuit Aug. 16 in the Delaware Court of Chancery. In addition to Amerigroup -- which is headquartered in Virginia Beach, Va., and incorporated in Delaware -- Goldman Sachs, WellPoint and a subsidiary created for the merger were all named as defendants. Several of Amerigroup's directors were also named as defendants, including Thomas E. Capps, James G. Carlson and Jeffrey B. Child.

Read the whole piece here


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