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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 29, 2013

Goldman Sachs's New Business Standards--Part III

Eamon Murphy in a Daily Finance article, says that Goldman Sachs will now base its bonuses for employees on their not embarrassing the firm.  That's a very lenient criterion when you consider that Goldman gets to define what is embarrassing and what is not.  For our part, almost every time Goldman makes a profit is an embarrassment when you consider that Goldman does little to add to the public welfare and a lot to disenfranchise everyone else by acquiring the wealth from everyone else in order to enhance themselves.

Below are some standards (other than avoiding embarrassment, that is) that Goldman Sachs might consider before giving away those bonuses.  These are the right lessons to learn:

 1.  Not lobbying for lax regulatory standards;
 2.  Abstaining from making any campaign contributions for favors from politicians;
 3.  Making sure Goldman guys refrain from any "public" service that they may feel like contributing especially in Treasury, in the SEC, in the CFTC or any other regulatory body;
 4.  Getting rid of "dark pools" of derivatives or at least putting them on exhanges;
 5.  Not speculating on food, oil or any other commodites that they do not own;
 6.  Not committing fraud through securitization;
 7. Not looking for tax loopholes or using foreign tax havens;
 8.  Avoiding obtaining or using insider information and HFT;
 9.  Making sure conflicts of interest do not favor Goldman;
10.  Being honest, upright and transparent in all dealings.

New Standard for Goldman Sachs Bonuses:  Don't Embarrass the Firm
By Eamon Murphy - Daily Finance
. . . .
 But Goldman bankers have a new criterion to consider when striving for a big reward at bonus time -- a standard that even its CEO and chairman Lloyd Blankfein has memorably struggled with in recent years: Citing a company report, Bloomberg reports that "the firm is reviewing employees' efforts to protect its reputation and win clients' trust."

This directive is coming from the management of a bank whose leader once told the Senate "I don't believe there is any obligation" to inform investors when the firm has taken a position against a product it's selling. Only in finance.

According to Bloomberg, Blankfein himself "led 23 three-hour sessions in 2011 and 2012 with partners and managing directors that stressed personal accountability and included a case study about communications within the firm and with clients." In a statement, Blankfein said the company's business standards committee -- created in May 2010 after a cluster of particularly disastrous transactions led to a lawsuit by the Securities and Exchange Commission, and the Senate hearing referenced above -- "is part of a much larger, ongoing commitment to learn the right lessons from recent experiences."
Read the whole article here


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