SEC charges GS with fraud

[piezoe]

Quote from Ghost of Cutten:

It seems strange that 40% of the commissioners voted against prosecution. If it was a case worth prosecuting shouldn't there have been a unanimous vote?

There must be more egregious cases of misconduct in the bubble years than this incidence. One gets the impression Goldman are being singled out for political reasons only. But they are not Enron, they are not Worldcom, they are not even Countrywide Financial. The authorities risk derailing the whole reform effort if they cry wolf over non-crimes and end up with egg on their faces when the prosecution collapses.

The options are:

1. The case should be slam dunk, but there are politics involved.

2. The case is a bit shaky and the commissioners had legitimate differences of opinion based on facts.

3. The case is a bit shaky and there are politics involved.

After forty years of dealing with Wall Street, a non-naive knowledge of a history that goes back to the buttonwood tree, and knowing that the vote was along part lines, I'm inclined to go with option 1. That means of course that while the case should be a slam dunk, in reality it is not.

It is Obama, however, not Philip Gramm, in the White House. Therefore it seems the nod must go to Shipiro and Co. The outcome of this case may go a long way toward revealing whether or not Mr. Obama is an elephant dressed in a donkey suit. Some have their suspicions.

 

[MarketMasher]

In Ritholtz's blog he references that Tourre told ACA that Paulson was investing $200 million in the CDO (in answer to a reader's comment)

http://www.ritholtz.com/blog/2010/04/rule-10b-5-manipulative-and-deceptive-practices/

"BR: Fabrice Tourre represented that John Paulson was investing $200 million into Abacus 2007. In fact, he was doing the opposite, and Goldman Sachs knew it. That is material misrepresentation.

Read the complaint"

If that really happened, it looks kinda bad, but the SEC better have that in writing/e-mail.

 

[asiaprop]

Lol, why should I defend GS? I mentioned time and again that I have no issues with bowing to you guys when GS is convicted in court. This has not even happened yet. I always claimed GS is not the only entity who committed wrongdoing, nothing more nothing less, please feel free to post one of my old posts if you disagree with this statement.

By the way I shorted GS and also look for turning points in other financials (has not occurred yet and may not happen anytime soon either).

Quote from spinn:

He is Japanese so he killed himself.

Too bad Lloyd Blankfein isnt Japanese.

 

[asiaprop]

exactly. What SEC is doing is the same than calling shorts on AAPL. There are tons of firms out there who have done much worse and it looks to me the SEC has zero evidence in their hand. All they do right now is make an elephant out of a mosquito. Do I think GS acted ethically correct? Heck no, but shame on SEC and all related bodies if this is all they can do...

Quote from Ghost of Cutten:

It seems strange that 40% of the commissioners voted against prosecution. If it was a case worth prosecuting shouldn't there have been a unanimous vote?

There must be more egregious cases of misconduct in the bubble years than this incidence. One gets the impression Goldman are being singled out for political reasons only. But they are not Enron, they are not Worldcom, they are not even Countrywide Financial. The authorities risk derailing the whole reform effort if they cry wolf over non-crimes and end up with egg on their faces when the prosecution collapses.

 

[wmb]

The most bothersome part about a company like GS is that they made money after borrowing beaucoup bucks from the fed.and only paying half back and utilizing the balance to leverage their bonuses. ITs as if someone knows the sh.t is going to hit the fan soon "so lets move this market up and make some cash moving it down"! Why they refuse to pay all the money back is beyond comprehension. Why they can't figure out what to do with billions other than expend it on themselves for outrageous bonus schedules, when they were culbable in toppling the american economy in 2008. Astonishing on so many levels. The Federal government with Obama in charge has done nothing more than Bush. what also is astonishing is the lack of interest and knowledge in this subject. Where is the outrage from the GS employees! Are they all complicit with this type of trashy work all for a an ego ride.

 

[asiaprop]

I think I am one of the least socialist or politically motivated guys in here but I think even you need to admit that this SEC charge and the vote are highly politically motivated. I agree with you fully that Paulson is not to be faulted for anything of this but GS may get away with a slap on their cheek. What is much more hurting is the reputational damage plus potentially lost government contracts in the US, Asia, and Europe. The charge has already done its harm no matter what the actual outcome of this charge is gonna be. Obama knows that he will have a very tough time to press ahead with financial reform at least as suggested in the current bill. Something needed to be done to win over the >=1 republican vote to start deliberation. Wasnt it a very ironic sign of politics at stake that both dissenting votes in the SEC split vote came from republicans? The world is a funny place. It does not pay at all to make big bets from a trading perspective, too many unknowns in the game. Take the small profits here and there and run as fast as you can....

Quote from Ghost of Cutten:

Hence the 3-2 split vote? Lol

 

[nutmeg]

What is much more hurting is the reputational damage plus potentially lost government contracts in the US, Asia, and Europe.
------------------

Plus GS guys are smart. Imo, they bring brainpower to the govt office. They could be shut out of gov't jobs.

 

[shortie]

if Buffett is not selling GS, than GS will be ok I guess

 

[Alex_in_Oz]

Buffet also didn't sell H&R Block before the shit hit.....amongst many others.

 

[poyayan]

Quote from wmb:

The most bothersome part about a company like GS is that they made money after borrowing beaucoup bucks from the fed.and only paying half back and utilizing the balance to leverage their bonuses. ITs as if someone knows the sh.t is going to hit the fan soon "so lets move this market up and make some cash moving it down"! Why they refuse to pay all the money back is beyond comprehension. Why they can't figure out what to do with billions other than expend it on themselves for outrageous bonus schedules, when they were culbable in toppling the american economy in 2008. Astonishing on so many levels. The Federal government with Obama in charge has done nothing more than Bush. what also is astonishing is the lack of interest and knowledge in this subject. Where is the outrage from the GS employees! Are they all complicit with this type of trashy work all for a an ego ride.

Exactly, I keep double down and double down and I ran out of cash. Then, I cried to sugar daddy to lend me unlimited cash. Guess what, eventually my double down will work if I have unlimited cash.

Then I brag about how smart I am betting long when you suckers were all scared.