GoldmanSachs666 Message Board

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

Sunday, May 26, 2013

Goldman Sachs's New Business Standards--Part II

Goldman Sachs has apparently spent 100,000 hours training employees in the new practices of the bank.  Goldman "want their reputation back."  In order for Goldman to create a good reputation, they must first admit to the mistakes and wrong doing that they have committed in the past.  If they do not admit ethical and moral lapses, how can they possibly improve their behavior?

Goldman perpetrated fraud on pensioners and savers in order to transfer others' hard-earned money to its own coffers but Blankfein is more concerned about his personal embarrassment when being asked about the bank's predation on others rather than the actual fraud itself.

Blankfein's legacy and reputation are bound up in the frauds that he and the bank have committed but he has never had to admit to doing anything wrong.  The bank, instead, was fined paltry sums of money that no one in the bank even missed.

As far as the bank's standards regarding Structured Products (page 3), here are some suggestions:  In order to evaluate and approve future transactions, it will be necessary for Goldman to evaluate previous transactions involving the use of CDOs, RMBS and CDSs.  One good way to do that would be for Goldman to drop their commercial designation with its attendant bailout provisions via the FDIC.    Once Goldman returns to its original roots as an investment bank, the remainder of society can sleep better at nights knowing that any risks taken will be by the bank and not by the taxpayer.  As an investment bank, Goldman can underwrite and disclose all they want.

As for Transparency and Disclosure (page 3), Goldman should not coerce credit rating agencies to rate their derivatives to suit their own purposes as they so successfully did in Abacus

Goldman should stop lobbying Congress and the regulators who are making the new financial rules.  We do not want Goldman's lax rules or large corporate loop-holes for which they continuously lobby.

Let the regulators make transparency and disclosure rules which Goldman can then follow without making up their own rules.

Goldman should serve in such a way that not only is the client properly served but also society is not preyed upon by banks.

Finally, put derivatives on exchanges or abolish them entirely and avoid off-balance sheet items (SIVs).

That is for starters!

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages



Washington, D.C., April 16, 2010 — The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.

"The product was new and complex but the deception and conflicts are old and simple," said Robert Khuzami, Director of the Division of Enforcement. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party."

Kenneth Lench, Chief of the SEC's Structured and New Products Unit, added, "The SEC continues to investigate the practices of investment banks and others involved in the securitization of complex financial products tied to the U.S. housing market as it was beginning to show signs of distress."
The SEC alleges that one of the world's largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.

According to the SEC's complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1 (ABACUS) all represented that the RMBS portfolio underlying the CDO was selected by ACA Management LLC (ACA), a third party with expertise in analyzing credit risk in RMBS. The SEC alleges that undisclosed in the marketing materials and unbeknownst to investors, the Paulson & Co. hedge fund, which was poised to benefit if the RMBS defaulted, played a significant role in selecting which RMBS should make up the portfolio.

The SEC's complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure. Given that financial short interest, Paulson & Co. had an economic incentive to select RMBS that it expected to experience credit events in the near future. Goldman Sachs did not disclose Paulson & Co.'s short position or its role in the collateral selection process in the term sheet, flip book, offering memorandum, or other marketing materials provided to investors.

The SEC alleges that Goldman Sachs Vice President Fabrice Tourre was principally responsible for ABACUS 2007-AC1. Tourre structured the transaction, prepared the marketing materials, and communicated directly with investors. Tourre allegedly knew of Paulson & Co.'s undisclosed short interest and role in the collateral selection process. In addition, he misled ACA into believing that Paulson & Co. invested approximately $200 million in the equity of ABACUS, indicating that Paulson & Co.'s interests in the collateral selection process were closely aligned with ACA's interests. In reality, however, their interests were sharply conflicting.

According to the SEC's complaint, the deal closed on April 26, 2007, and Paulson & Co. paid Goldman Sachs approximately $15 million for structuring and marketing ABACUS. By Oct. 24, 2007, 83 percent of the RMBS in the ABACUS portfolio had been downgraded and 17 percent were on negative watch. By Jan. 29, 2008, 99 percent of the portfolio had been downgraded.
Investors in the liabilities of ABACUS are alleged to have lost more than $1 billion.

The SEC's complaint charges Goldman Sachs and Tourre with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.

Read the article here


laserDliquidator said...

Goldman Sachs in collusion with Bain Capital, via their mutually beneficial (corrupt) law firms of and Paul Traub are STILL perpetrating frauds on the court in multiple states concering our company of (See NY Times article "Rigging the I.P.O. Game" March 2013).

Until they give back and control of the company they stole by Grand Larceny, SEC Fraud, Conspiracy and Bankruptcy Fraud - they shall remain nothing more than - Racketeers engaged in Organized Crimes.

GS666 said...


You would think by now with all that has been exposed that the fraud would be prosecuted or at the very least charges levied and arrests made and then let a Jury of our peers make the final verdict.

Unfortunately, after all the years I have been writing about bank fraud, it is evident that the governmwent has been and still is covering this up. Especially when it comes to Goldman Sachs, their power over our government as well as governments around the world keep them immune. Corruption at its best - right here in the good ole USA.

As we celebrate Memorial Day and remember all those who have served, sacrificed much and sacrificed all - their lives - so that the rest of us - the 99% - could enjoy the freedoms of this democracy along with the economic freedoms and opportunities that was once the hallmark of America.

Unfortunately those TOO BIG TO FAIL and TOO BIG TO BE PROSECUTED defile those we honor tomorrow.

Our democracy and freedom and the economic opportunity belongs to the masses not the the elite classes who would commit crimes and fraud to serve no other purpose than to line their "platilnum" lined pockets.

It is unfortunate that something has gone so terribly wrong in our judicial system led by a government - be it Democrat or Republican - that seemingly work for those 1%'ers.

I salute those who wear and have worn the uniforms of United States Armed Forces.

I deplore those who would make a sham of what they stand and fight for.

laserDliquidator said...

Well - Lar..

I've got a super surprise for them in June (and I'm going to need your help to make sure the story gets talked about).


--------- Your gonna luv it....

GS666 said...

Just let me know and we will post.

laserDliquidator said...

It is taking longer than I desire (because a former U.S. Attorney has joined my efforts and has to get up to speed).

But here's a "more than" hint of what's to come;

(NOTE: Adam B is an attorney in Philly and a venerate of DK - he has "brown nosed" the bad guys and sought my banning - from day 1)

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