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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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Friday, January 18, 2013

Goldman Sachs Defines Itself However It Wishes

We have said before that Goldman Sachs acts more like a hedge fund than an investment bank working for its clients.  The day trader here says he finds it difficult to make Goldman trades because of its "erratic intra-day trading."  But others imply that Goldman says it is one thing and then morphs into another thing; for example, it says it is getting rid of proprietary trading in order to comply with the Volcker Rule and yet it made half of its fourth quarter earnings on "trading" even though Goldman avoids the word "trading."  Also it can "front-run" without front running.  Neat, hey?
What Is Goldman Sachs?
By John Carney - CNBC
One of the most striking things about Goldman Sachs earnings reports is that the firm pretends it doesn't trade at all. Yet it derives about half of its income from things that many people would consider trading.

For years now, Goldman has banished the word trading from its lexicon. You won't find the word in its earnings reports. Officially, the firm just doesn't having trading units at all. Instead they have "market markers" who are supposedly focused on facilitating customer business. And other folks who make "principal transactions," which means making longer term investments with Goldman's money.
The phrases market making and customer facilitation, however, conceal the fact that these things involve a lot of trading. And not just trading in response to customer orders. You see, Goldman doesn't wait for a customer to place an order for a financial product before it takes a position in a product. It facilitates customers by anticipating customer order flow. That is to say, it buys and sells financial assets that it expects its clients will want to buy or sell in the future. 

Read the entire article here

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