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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

Tuesday, December 4, 2012

Goldman Sachs's Clients Are Fair Game

 Goldman Sachs has been accused by trustees for creditors of Washington Mutual Inc. of a naked short-selling scheme.

 Below is a definition and explanation of naked short selling from Investopdia:

Definition of 'Naked Shorting'

The illegal practice of short selling shares that have not been affirmatively determined to exist.  Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short.  But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen.

While no exact system of measurement exists, most point to the level of trades that fail to deliver from the seller to the buyer within the mandatory three-day stock settlement period as evidence of naked shorting.  Naked shorts may represent a major potion of these failed trades.

Investopedia explains 'Naked Shorting'

Naked shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns.  

In 2007, the Securities and Exchange Commission (SEC) amended Regulation SHO to further limit possibilities for naked shorting by removing loopholes that existed for some broker/dealers. Regulation SHO requires lists to be published that track stocks with unusually high trends in "fail to deliver" shares. Some analysts point to the fact that naked shorting, albeit inadvertently, may help markets stay in balance by allowing the negative sentiment to be reflected in certain stocks' prices.
You can find the definition here

WaMu Trustees Seek Goldman Probe
By Peg Brickley, Dow Jones Newswires - Fox Business
. . . .
Creditor attorneys say there's "unmistakable" evidence Washington Mutual was victimized by naked short sales in the months leading up to its September 2008 bankruptcy filing. They want to know if long-time investment banker Goldman Sachs was involved in "abnormally high levels' of short selling of Washington Mutual's stock.

Washington Mutual was the holding company that owned Washington Mutual Bank, or WaMu, a thrift swept under in 2008 after indulging in the subprime lending boom. Its final affairs are in the hands of a bankruptcy trust.

Goldman Sachs was called on by Washington Mutual, charged with shoring up market confidence and locating a buyer, court papers say.
"Instead of providing this promised support to [Washington Mutual], it appears that Goldman Sachs may have decided it could make more money by betraying its client," court papers allege.

Read the whole article here


LiberatedCit said...

Everyone is fair game as far as goldman sucks is concerned they paid handsomely for years for protection including this year and look at Corzine he was a top bundler for Obama and again no criminal charges

Sentinel ruling may hurt MF Global clientssnipThe appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.
Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business.
However, Thursday's ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.
"I don't think that's what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.
"It does not bode well for the protection of customer funds."
Worse, Grede said, is that the ruling suggests that a brokerage that allows customer money to be mixed with its own is not necessarily committing fraud.
That may raise the bar for proving that MF Global Holdings Ltd, under then-CEO Jon Corzine, misused customer funds as it scrambled to meet margin calls to back bets on European debt in the brokerage's final days. A $1.6 billion customer shortfall remains.
more Senior Goldman Sachs Execs Gave $130K To 'Obama Victory Fund' WHILE Eric Holder Was Deciding Whether To File Criminal Charges, Amid Scandal, Is Among Obama's Top Bundlers Employees Join Goldman Sachs Among Top Obama DonorsBy Jonathan D. Salant - Mar 20, 2012’s Wall Street Problem is Now America’s

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