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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

Wednesday, May 15, 2013

Goldman Sachs Wins Some and Loses Other Lawsuits

A New York state appeals court ordered the dismissal of a complaint in ACA Financial Guaranty Corp.'s  lawsuit against Goldman Sachs for "fraudulent inducement and fraudulent concealment."  Three out of five judges made the ruling which can be appealed to a higher court.  These judges believed Goldman's favorite argument that sophisticated investors should know what they are buying.

Thus the Rule by the Banks continues apace.
Goldman Sachs Wins Dismissal of Abacus CDO Suit on Appeal
By David McLaughlin & Chris Dolmetsch - Bloomberg

Goldman Sachs Group Inc. (GS) won dismissal of bond insurer ACA Financial Guaranty Corp.’s fraud lawsuit over a collateralized debt obligation known as Abacus.

A New York state appeals court in Manhattan today ordered the complaint against Goldman Sachs dismissed, overturning a lower-court ruling that had allowed the case to proceed.

ACA claimed that New York-based Goldman Sachs and hedge-fund firm Paulson & Co. conspired to induce ACA to provide financial guaranty insurance for the Abacus transaction and deceived the insurer into believing Paulson was a long investor when in fact it was taking a short position.

The appeals court said ACA could have uncovered Paulson’s actual position, “but apparently chose not to.” 

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