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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, April 11, 2013

How Many Ways Does Goldman Sachs Get Preferential Treatment?

Let me count one of those ways:  Goldman Sachs (accidentally) obtained preferential treatment when it received the Federal Reserve FOMC minutes, which give important information regarding intended monetary policy, before the public did.

The comments at the end of the following article show how little credence the "accidental" leak has with the public some of whom consider information leaks a feature of the system rather than a bug in the system.  There is a lot of cynicism from the public regarding all banks and their relationship with the Federal Reserve.

Goldman Sachs, Citigroup, Received Fed Minutes Early
By Lorraine Woellert, Craig Torres and Cheyenne Hopkins - Bloomberg Businessweek

Banks including Citigroup Inc. and Goldman Sachs Group Inc., along with congressional staff members and trade groups, received potentially market-moving Federal Reserve information 19 hours before the public in a release the central bank called accidental. 

Brian Gross, a member of the Fed’s congressional liaison staff, distributed the March 19-20 minutes of the Federal Open Market Committee meeting at 2 p.m. yesterday Washington time, according to an e-mail obtained by Bloomberg News. Gross referred questions to Fed spokeswoman Michelle Smith.
The release was “entirely accidental,” Smith said. “This was a list of professional contacts that one individual had,” she said. “This group of individuals does not in any normal course receive any information early.” The mistake was discovered this morning, according to the central bank.

FOMC minutes, which include comments on the committee’s discussions about the direction of monetary policy and its outlook for the economy, are among the Fed’s most closely scrutinized documents as the panel debates when to stop its third round of bond purchases.

Read the whole article here 


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