Posted on 04/16/2010 6:44:46 PM PDT by TigerLikesRooster
A volcanic cloud over Wall Street
Apr 16th 2010 | NEW YORK
From Economist.com
The charges against Goldman could have far wider consequences
IS THE most powerful and controversial firm on Wall Street about to get the comeuppance that so many think it deserves? On Friday April 16th America’s Securities and Exchange Commission (SEC) filed civil charges against Goldman Sachs and one of its vice-presidents, Fabrice Tourre, for allegedly defrauding investors by failing to disclose vital information about a financial product linked to subprime mortgages, as America’s housing market was starting to wobble. Goldman’s shares tumbled, dragging down stockmarkets.
The instrument in question, structured and marketed by Goldman, was a synthetic collateralised debt obligation (CDO), whose performance was tied to that of residential mortgage-backed securities. Goldman told its investors, who included some European banks, that the securities bundled together to form the CDO had been selected by an independent third party, ACA Management. The SEC alleges that the investment bank failed to disclose that another firm, Paulson & Co, a big hedge-fund manager, had in fact had a hand in choosing what went into the CDO.
This was a crucial omission, since Paulson & Co—run by John Paulson, who made billions in 2007-08 betting against the housing market—had taken a short position against the CDO; in other words, his firm would profit if the instrument performed poorly. “The product was new and complex but the deception and conflicts are old and simple,” said Robert Khuzami, head of the SEC’s enforcement division. Goldman called the charges “completely unfounded” and said it would contest them vigorously. Paulson & Co has not been charged; the firm issued a statement saying that ACA, as the third-party collateral manager, had sole authority over the selection of securities in the CDO.
(Excerpt) Read more at economist.com ...
I’m not holding my breath. These guys will get away with it.
Prosecute LibTard donors at that level? ROFLMAO!
This kind of cynical double-dealing is par-for-the-course for Goldman. They pulled off a similar scam on their own clients when they structured massive currency and interest-rate swap deals to help Greece hide its true debt to GDP ratio from the EU and investors, then sold Greek bonds to unwitting clients who had no idea how bad Greece’s books really were.
The tip of the Iceberg. How will they cover up all the Crat involvement?
It is like being delt a Royal Flush and everyone else has a Full House.
Most hedge funds are slimy and almost all of them are HUGE Dem contributors. They own the Senate.
civil cHarges? Oh dearest, dearest me. When and if Goldman is found guilty the taxpayers will certainly take a hit paying the judgement.
I’m LMAO that this happened on Option Expiration. A play right out of the Greenspan / Bernanke handbook, but for once it’s a last-minute kick in the groin for the bulls.
Typical Commie behavior..get your “supporters” before they get you...
Stalin...
June, 1937, Mikhail Tukhachevsky and seven other top Red Army commanders were charged with conspiracy with Germany. All eight were convicted and executed. All told, 30,000 members of the armed forces were executed. This included fifty per cent of all army officers.
Where are those who lurked on FR prior to the 2008 crash which countered warnings repeatedly, that the trillions in sub-prime international banking scams were 'nothing to worry about' and anyone who issued warnings 'had no idea what they were speaking'-- where are those big banking shills now?
The same mega-banking wild west derivative empire (now more powerful & far more dangerous to the tax payers via tax-funded bailouts) that triggered the sub-prime crash, when the DOW was over 14.000 have once again set the financial stage for a far worse crash, possibly prior to 2010 ending.
So the Democrats will be giving up their contributions from Goldman?
GS may walk this time. Still, at some point, when everything is crashing down on them, they will throw their buddies under the bus to buy some time and figure out next moves.
It is on YouTube: Glenn Explains The Theft
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