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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, August 14, 2013

Goldman Sachs: Profiteering Apace

Both the CFTC and the Federal Reserve regulators are examining the role of Goldman Sachs in manipulating commodity markets through their ownership of storage warehouses for metals.  It is time to make it illegal for banks to control commodity prices through warehousing manipulation.
Investigation of Banks' Role in Price Rigging Escalates With New Subpoenas
By Alan Pyke - ThinkProgress

Regulators have ordered an aluminum company to preserve three years of documents that may be relevant to an investigation into price rigging in the markets for metals, Reuters reported Monday. The Commodity Futures Trading Commission (CFTC) subpoena is the latest signal of heightened regulatory scrutiny of financial firms’ role in the physical commodities markets, three weeks after a New York Times report revealed firms like Goldman Sachs exert control over metal prices that boosts bank profits at the expense of consumers.
. . . .
Those LME rules and fee arrangements have existed for a long time, though, and experts say the market abuses now under investigation stem from the financial sector’s move into the warehousing business. The alleged Goldman scheme hinges on the investment bank’s 2010 purchase of Metro International Trade Services, one of the largest single metal storage companies. Until the deregulation wave of the 1980s and ‘90s, banks were forbidden from such crosspollination of ownership. But years of lobbying eroded the barriers that had restricted financial firms from entering the physical commodities business rather than simply making trades tied to commodity prices. The Federal Reserve has the power to reinstate such barriers, and is reportedly reviewing its past approval of financial industry purchases of warehouses, pipelines, and other physical commodities infrastructure. 

Read the full article here


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