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Fraud*
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

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Sunday, September 30, 2012

How Goldman Sachs's "Data" Works To Maintain the Status Quo

Matt Taibbi has written an article commenting on the book by Jeff Connaughton entitled The Payoff:  Why Wall Street Always Wins.  Connaughton was Senator Ted Kaufman's former aide and his book gives a behind-the-scenes look at some interesting actions by politicians and lobbyists.  Matt reviews how Kaufman tried to fight corruption by bringing forward financial fixes and how he was thwarted by Wall Street's "Blob." 

The Obama administration is not portrayed in a very flattering manner.  The book (and the review) covers the uptick rule, naked short-selling, TBTF, high-frequency trading, etc. Of course, that Great Lobbyist Goldman Sachs makes sure that things do not change to their detriment.

As Taibbi concludes:  "It's scary..."
A Rare Look at Why the Government Won't Fight Wall Street
By Matt Taibbi - Taibblog (Rolling Stone)
. . . .
. . .Kaufman recruited some other senators to endorse the idea, and as late as 2009, Connaughton and Kaufman were convinced they were going to get the form. "I said to Ted, 'We’re going to change the way stocks are traded in this country.'"

But before the change could be made, Goldman, Sachs issued "data" showing that there was "no correlation" between naked short selling and price movements. When Connaughton asked an Isakson staffer what the data said, the staffer, intimidated by Goldman, replied, "The data proves we're full of shit." Connaughton looked at the data and realized instantly that it was a bunch of irrelevant gobbledygook, even firing off an angry letter to Goldman telling them the tactic was beneath even them.
But Goldman’s tactic worked. A roundtable to discuss the idea was scheduled by the SEC on September 24, 2009. Of the nine invited participants, "all but one" were for the status quo. Connaughton expected the DTCC representatives to unveil their reform idea, but they didn’t:
Afterwards, I went over to [the DTCC representatives] and asked, "What happened?" Sheepishly, and to their credit, they admitted: "We got pulled back." They meant: by their board, by the Wall Street powers-that-be.
Please read the whole article here

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