# Goldman Sachs Fraud... no **** Sherlock!



## BradK (17 April 2010)

Surprise, surprise... the SEC has finally laid charges against Goldman Sachs. 

http://www.smh.com.au/business/fraud-charges-a-nightmare-for-goldman-20100417-skw0.html

Would love to see Lloyd Blankfein in prison oranges! The economic terrorism he has overseen surely makes him the worst of the worst. Send him to Gitmo I say!!! 

Brad


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## Macquack (18 April 2010)

BradK said:


> Would love to see Lloyd Blankfein in prison oranges! The economic terrorism he has overseen surely makes him the worst of the worst. Send him to Gitmo I say!!!
> 
> Brad




I second that motion.



> "These charges are far more severe than anyone had imagined," and suggest *Goldman teamed with "the leading short-seller in the industry to design a portfolio of securities that would crash*," said John Coffee, a securities law professor at Columbia Law School in New York.




Goldman Sachs are scum.


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## GumbyLearner (18 April 2010)

It is a civil law suit and the Goldman Sucks crowd will not be going to jail. Another disappointing murdoched headline to ignore.


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## The Owls (18 April 2010)

The dictionary describes FRAUD as:

fraud   /frɔd/  Show Spelled[frawd]  Show IPA 
–noun 
*1. deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage. 
2. a particular instance of such deceit or trickery: mail fraud; election frauds. 
3. any deception, trickery, or humbug: That diet book is a fraud and a waste of time. 
4. a person who makes deceitful pretenses; sham; poseur*. 

If our courts applied the above to the CEOs and directors of listed and unlised property, mortgage and investment funds the government would have to build new courts to conduct the cases due to the many being charged. Why are our regulators lacking balls...........


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## GumbyLearner (18 April 2010)

The Owls said:


> Why are our regulators lacking balls...........




Well Owls

In the case of GS & the US Regulators. The US Government is effectively suing it itself. They were bailed out with public money and most Main St Americans are still fuming that Wall St was bailed-out. (Tea party protests)

Do you seriously believe that Government Appointments by George Bush & Barack Obama of Henry Paulson (recruited from GS), Timothy Geithner (recruited from GS), Larry Summers (recruited from GS), Gensler at the CFTC (recruited from GS) are seriously going to jail? ROTFLMAO.  Oh stop, it hurts. ROTFLMAO

Obama has adopted the pre-commie dictator word Czar for each government appointee made by his administration. For the purist Obama's economic policies border on the true definition of fascism. 

This is a bull**** media circus story that should be ignored IMO.

But if you want to have a laugh at how they were able to set this up then enjoy. 

APPLY WITHIN: NO BRAINS REQUIRED


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## Knobby22 (18 April 2010)

If the banks succeed in stopping additional regulation on them by buying out each of the senators, we shall know the USA is doomed.

Especially after this obvious corruption.


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## Miner (18 April 2010)

Knobby22 said:


> If the banks succeed in stopping additional regulation on them by buying out each of the senators, we shall know the USA is doomed.
> 
> Especially after this obvious corruption.




Very good point with the assumption that most of the senators are not already bought by banks and other industries and USA is not doomed already .


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## Bushman (19 April 2010)

OMG a conflict of interest in the financial services/investment banking sector. 

While there is seemingly an obvious lack of disclosure by GS re the conflict for Paulson & Co in helping set-up the CDOs and then going short against these same instruments, some of the heat surely has to go to the opaque hedge fund industry as well. 

As an aside, Paulson & Co funds currently have very large holdings in gold EFTs (one of the largest holders of the SDPR Gold Trust ETF). If there is a 'run' on these hedge funds then there might be some selling pressure for gold in the coming weeks - see below from 'Market Watch'. 

'Gold prices fell on Friday, partly on concern that if Paulson investors try to redeem from the firm's hedge funds, the firm might be forced to unwind some of its gold positions, pressuring prices.' http://www.marketwatch.com/story/paulson-co-not-charged-in-sec-suit-vs-goldman-2010-04-16


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## Boggo (19 April 2010)

Interesting...

http://www.youtube.com/watch?v=VSwWy4E6I04&feature=player_embedded#!


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## wayneL (19 April 2010)

Boggo said:


> Interesting...
> 
> http://www.youtube.com/watch?v=VSwWy4E6I04&feature=player_embedded#!




LOL corn:corn:corn:


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## baby_swallow (19 April 2010)

BradK said:


> Surprise, surprise... the SEC has finally laid charges against Goldman Sachs.
> 
> http://www.smh.com.au/business/fraud-charges-a-nightmare-for-goldman-20100417-skw0.html
> 
> ...




No, they can't do that to him. He's doing God's work!


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## ghotib (19 April 2010)

This from Business Spectator suggests that the case will hinge on whether it can be proved that GS misled "an independent, third-party collateral manager, ACA," whose function in the deal feels to me very like that of a ratings agency:
http://www.businessspectator.com.au...an-Sach-pd20100419-4MSW9?OpenDocument&src=sph


> The SEC has strong evidence that Goldman Sachs and Tourre knew that ACA was under the misapprehension that Paulson was an equity investor. But they haven’t produced evidence that demonstrates that Goldman Sachs or Tourre were directly responsible for ACA forming this erroneous view.
> 
> So the question becomes whether Goldman and Tourre should have corrected ACA’s misapprehension, even though it would have meant that their deal cratered.
> 
> ...



I guess you could call this a stinking fish defence.

Ghoti


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## Bushman (19 April 2010)

My thoughts on these class actions (and we have had them in Australia) is that doesn't the legal system create a 'moral hazard' for investors by allowing them to be bailed out via civil proceedings? It is a similar argument than for corporations being bailed out by the government. 

If an investor is forced to take a loss then surely they will make a better capital allocation decision next time? 

In this instance, the learning outcomes could be: 
1. the game is rigged; 
2. derivatives are complex and beyond my comprehension; 
3. house prices do not always go up; 
4. diversification is meaningless if all the instruments owned are in the same asset class (i.e. housing); 
5. disclosure in derivative markets are poor; 
etc etc. 

Instead, the learning outcome will now be 'if i do something stupid then i will sue'. Net outcome; hot money chases yield higher up the risk:return pay-off. 

Anyway it irks me. If they have done the wrong thing, the SEC should charge them. Investors should take their medicine and make better decisions next time. 

If they have done their dough permanently then welcome to capitalism! Rant, rant ...


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## Atlas79 (19 April 2010)

GumbyLearner said:


> It is a civil law suit and the Goldman Sucks crowd will not be going to jail. Another disappointing murdoched headline to ignore.




Maybe...but who knows what the court case will uncover...

This is just the beginning of the very first domino wobbling.

Just maybe some very large, very unexpected ones will soon be wobbling also. Mark my words, things are about to get "interesting".

:jerry:jerry


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## The Owls (19 April 2010)

Goldman Sachs was a major cause in the Financial Crisis and they again screw the world and me today. Look at the DOW down 1.13% and ASX200 down 1.5%. Fraud or not it has cost current shareholders a motza....


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## prawn_86 (19 April 2010)

Bushman said:


> My thoughts on these class actions (and we have had them in Australia) is that doesn't the legal system create a 'moral hazard' for investors by allowing them to be bailed out via civil proceedings? It is a similar argument than for corporations being bailed out by the government.
> 
> If an investor is forced to take a loss then surely they will make a better capital allocation decision next time?
> 
> ...




To put an opposite point of view to this, if GS have acted illegally, then investors can argue they were mislead and have a right to compo.

I do agree that if GS have done something illegal they should be punished, and so should investors who make poor decisions, but if those poor decisions are based on illagal discloures then they should have a right to some money being returned, similar to breach of contract etc


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## explod (19 April 2010)

> Gumbylearner
> Do you seriously believe that Government Appointments by George Bush & Barack Obama of Henry Paulson (recruited from GS), Timothy Geithner (recruited from GS), Larry Summers (recruited from GS), Gensler at the CFTC (recruited from GS) are seriously going to jail? ROTFLMAO.  Oh stop, it hurts. ROTFLMAO




Abslolutely Gumby, just keep accumulating those gold and silver coins Champ


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## nioka (19 April 2010)

Goldigger Sucks are probably capitalising on their problems. They would have had some advanced warning that the game was up. I'll bet they have shorted the market knowing it would fall when the news broke.

The whole system is broken and shareholding has gone from being a place where companies raised capital to a casino game that uses as pawns the shares of companies with no regard to the companies themselves. 

Where there is gambling there is probably corruption and cheating.


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## Naked shorts (19 April 2010)

lol these threads all ways bring em out of the woodwork.


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## white_goodman (19 April 2010)

nioka said:


> Goldigger Sucks are probably capitalising on their problems. They would have had some advanced warning that the game was up. I'll bet they have shorted the market knowing it would fall when the news broke




they did short S&P allegedly


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## nomore4s (19 April 2010)

The Owls said:


> Goldman Sachs was a major cause in the Financial Crisis and they again screw the world and me today. Look at the DOW down 1.13% and ASX200 down 1.5%. Fraud or not it has cost current shareholders a motza....




Didn't hear too many shareholders complaining when these companies caused the massive bubbles to inflate, funny how we only ever here any complaints when they finally pop


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## nunthewiser (19 April 2010)

Personally think this ones just the tip of the iceburg.

profit from it , lose from it , whinge about it.....its how money changes hands, not a lot you and i can do about it apart from go along for the ride.


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## Whiskers (20 April 2010)

Bushman said:


> My thoughts on these class actions (and we have had them in Australia) is that doesn't the legal system create a 'moral hazard' for investors by allowing them to be bailed out via civil proceedings? It is a similar argument than for corporations being bailed out by the government.




I tend to agree with the general thrust of this, that greedy wreckless investors chasing a quick buck adding fuel to the fire deserve to pay for their wrecklessness...however always on the basis of playing within the law to protect the integrity of the system. Shareholder risk and 'Caveat emptor' doesn't, or at least shouldn't, dissolve the vendors responsibilities to honesty and truthfulness.




prawn_86 said:


> To put an opposite point of view to this, if GS have acted illegally, then investors can argue they were mislead and have a right to compo.
> 
> I do agree that if GS have done something illegal they should be punished, and so should investors who make poor decisions, but if those poor decisions are based on illagal discloures then they should have a right to some money being returned, *similar to breach of contract* etc




Yes, I agree. Common Law negligence and fraud basically provides recourse.



The Owls said:


> The dictionary describes FRAUD as:
> 
> fraud   /frɔd/ Show Spelled[frawd] Show IPA
> –noun
> ...




*However the legal definition and criteria for Fraud *(and negligence) is somewhat different to the general dictionary meaning. The following is probably a fairly accurate definition of the US legal meaning.



> *Fraud*: A false representation of a matter of fact””whether by words or by conduct, by false or misleading allegations, *or by concealment of what should have been disclosed*””that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury. http://legal-dictionary.thefreedictionary.com/fraud




The problem often comes down to, as I understand this case will, to "by concealment of what should have been disclosed" with so much fine print in share and general property dealings purporting or implying indemnities.

As I understand it, GS have previously (since the GFC) acknowledged what is alleged by the SEC 'concealment of what should have been disclosed' on the premise that they (GS) did not have to disclose it... hence some pretty powerful lobbying to try to stop it going to court.


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## Scalper23 (14 June 2010)

The usual thing to do in the market when a bank rings you with a deal is look at the other side and take the opposite view. They would not sell it if it was a good deal. How our hedge funds got suckered into these deals is beyond me. When an overseas bank rings Australia to peddle securities doesn't that set off alarm bells.


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## Naked shorts (15 June 2010)

Scalper23 said:


> The usual thing to do in the market when a bank rings you with a deal is look at the other side and take the opposite view. They would not sell it if it was a good deal. How our hedge funds got suckered into these deals is beyond me. When an overseas bank rings Australia to peddle securities doesn't that set off alarm bells.




No because GS is an investment bank, its their job to match up investors with investments. They've been doing it for 150 or so years fyi

And regardless, GS has offices in Sydney and Melbourne (and I think a really small one in Brisbane), you are incorrect in implying it was an overseas bank calling Australia.


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## Scalper23 (15 June 2010)

Naked shorts said:


> No because GS is an investment bank, its their job to match up investors with investments. They've been doing it for 150 or so years fyi
> 
> And regardless, GS has offices in Sydney and Melbourne (and I think a really small one in Brisbane), you are incorrect in implying it was an overseas bank calling Australia.





The urgency for the trade came from US executives, according to the media.

 In my experience in bond markets over the years, you just need to be carefull of deals that are been rushed. And yes this stuff has been going on for a long time.


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## Naked shorts (16 June 2010)

Scalper23 said:


> In my experience in bond markets over the years, you just need to be carefull of deals that are been rushed.




Yes thats the same with any deal, buts its not like GS was selling this stuff to old disabled grandmothers with alzheimer's. The Australian Hedge fund lost out because of their own sheer incompetence, nothing more nothing less. They WILLINGLY risked their money in hope of a gain, turns out they didn't do enough research and they lost out. Typical case of losers b*tching about winners.


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