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Goldman Sachs is accused of fraud
BlondeHeadOn
Posts: 2,277 Forumite
From BBC link here:
http://news.bbc.co.uk/1/hi/business/8625931.stm
Goldman Sachs has been accused of fraud in a civil suit filed by US financial watchdog, the Securities and Exchange Commission (SEC).
It alleges that the bank marketed a complex sub-prime mortgage package but did not reveal that a major hedge fund had bet against the securities.
Goldman's shares fell more than 10% on the news of the accusations against the firm and one of its vice presidents.
The bank escaped relatively unscathed from the financial crisis.
http://news.bbc.co.uk/1/hi/business/8625931.stm
Goldman Sachs has been accused of fraud in a civil suit filed by US financial watchdog, the Securities and Exchange Commission (SEC).
It alleges that the bank marketed a complex sub-prime mortgage package but did not reveal that a major hedge fund had bet against the securities.
Goldman's shares fell more than 10% on the news of the accusations against the firm and one of its vice presidents.
The bank escaped relatively unscathed from the financial crisis.
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Comments
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... And a bit more from the article:
This is the first time regulators have acted against a Wall Street deal that allegedly helped investors take advantage of the US housing market collapse.
Goldman did not tell investors "vital information" about the Abacus product, the watchdog said.
That included not revealing that a major hedge fund, Paulson & Co, was involved in choosing which securities would be part of the portfolio, and had bet its value would fall.
Mmm - Paulson & Co.? Why does that name sound familiar...?...?...0 -
Don't you just hate that
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
I guess we now have the answer to how Paulson & Co managed to make $$Loads when everyone else was losing $$Loads :eek:
This is only the start.'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
From the news article it's hard to see what Goldmans did wrong. Legally and morally they can't reveal the positions held by their clients.
Presumably there's more to it than that otherwise there wouldn't be a trial.
Paulson. Hmmm. Coincidence is possible, I have no idea.0 -
I think it's more that the 'client' decided what the product would consist of, before trading against it.'In nature, there are neither rewards nor punishments - there are Consequences.'0
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...Presumably there's more to it than that otherwise there wouldn't be a trial.
I wonder how long this one will last! :think:There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0 -
From the news article it's hard to see what Goldmans did wrong. Legally and morally they can't reveal the positions held by their clients.
Presumably there's more to it than that otherwise there wouldn't be a trial.
Paulson. Hmmm. Coincidence is possible, I have no idea.
The text of the case is at http://www.scribd.com/doc/30031060/S-E-C-s-Civil-Lawsuit-Against-Goldman-Over-C-D-O . I think it looks bad for goldmans. Remember, this is not a criminal case. Their case is that the disclosure documents stated that ACA selected the CDP portfolio, while in actual fact, it did not.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Some industry opinions.
http://uk.finance.yahoo.com/news/instant-view-sec-charges-goldman-sachs-with-fraud-reuters_molt-24a9c52256fc.html?x=0'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
The SEC wouldnt have persued this unless there is a strong case; its too complex to do unless the evidence they have is solid.
I Reckon a whistleblower or email chain to high ranking goldman officials must be involved.
They will struggle to prosecute the case if the Jury have the crap confused out of them.0 -
They will struggle to prosecute the case if the Jury have the crap confused out of them.
However, the majority of public opinion in the US at the moment are that bankers are lying bar stewards who take good American bailout money, and then reposess poor American homes. It is quite possible Goldman might get a hanging jury.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0
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