SEC charges GS with fraud
- Thread starter nitro
- Start date
To whom will they look like bumbling fools? Its like OJ and his defense team against the States attorney in calif. ARe you nutty or something? Instead of bashing the efforts of those whose job it is to uncover the crap in this country maybe you should come out from the darkside and think about what your rooting for! I for one applaud each and every employee of the SEC for continuing to go to work in spite of the incredibly amount of unethical and corrupt citizens in this country. The New york States Attorneys office should be applauded for trying to do something about a corporation who continually tries to skirt the system? You know damm well their crooks why support that crap!
The most interesting thing about this now is that both the SEC and GS have a LOT to lose by caving to the other side. The SEC will look like irredeemable morons if they lose the case. GS will look like panty-waisted sissies if they settle after crying innocence so loudly. Either way, the stakes are BIG for both sides in the game of Chicken and its time to see who blinks first.
I strongly disagree.
GS needs to:
1) Admit that the excesses of all caused catastrophic detriment to the entire world, and that they participated blindly and wrongfully in the frenzy of cheap money by using sub-prime as a fiat.
2) [Admit] That self policing doesn't work for two reasons, one, that uncontrolled greed and people with no scruples can infiltrate any corporation, and they are not immune to it, and two, that if others are regulated in the same way, they aren't under undue pressure to make money at any cost.
3) Apologize to each and every client it did wrong face to face. Lloyd Blankfein needs to get on an airplane (if he even survives this, otherwise his replacement) and build relationships again, and vowing to stand by their clients by putting them before themselves.
4) Genuinely apologize to the American people for their role in this catastrophe, vowing never to be on the wrong side again. Thanking the American people for the help GS received through tax payer money would probably go a long way towards winning most hearts, but it is not clear at this point.
And then take the medicine of whatever massive fine and jail time comes their way.
I disagree with your disagreement
GS has dug its heels in from the beginning on this. If they give-in, those would end up being be high-heels. They opened themselves up to lawsuits by not disclosing the Wells notice (what can they say - "We didn't think it was material"? Then neither does any other company receiving a Wells notice). Why would they put themselves in that position unless they were supremely confident they would prove their innocence? They have taken their stand in actions and words, and backing down now would be an admission of guilt and open them up to even more legal troubles.
Also, if GS caves, then you know every other bank that participated is teed-up behind them.
I don't think an "apology" at this point would satiate the torch-carrying masses, only fan the flames. "Sorry for the bust. My bad. Bonus time. We squared away now?"
As for GS' clients, I don't think GS has clients in the traditional sense anymore. They have counter-parties that they trade against. They abandoned the IB model, so "clients" should have no illusion about it anymore. Blankfein himself admitted during his testimony that their business has changed over the last 10 years. Talking face-to-face with clients won't change that fact.
GS is in this fight to win it - and they just may have the firepower to do it if they don't wilt under the heat.
There is a rule in Chess. Most people when they are put in check, their initial reaction is to grab the kind and flee. The masters look to capture the opposing piece first, then block, and only then flee.Quote from MarketMasher:
I disagree with your disagreement
GS has dug its heels in from the beginning on this.
GS reacted the way all these companies react these days, the way their lawyers tell them to, instead of the way they probably wanted to react, which may well have been to be forthright. Their trading instincts are razor sharp. They are socially dysfunctional.
I agree that this is almost certainly a wrong decision. Probably lawyers again making decisions for a corporation that probably doesn't have anything to hide.
GS understands logic, theory, mathematics, computer science very well. It is fucking clueless when it comes to real people in the real world and it is completely out of touch with everything that is happening around them. I hate to say it, but I have seen it so many times with my own two eyes: the more money you have the more you want to build fences around your lawn, and separate yourself from your neighbor, and have your kids being driven by limousine to school, and on and on. If it were me, everyone at GS would have to work at Habitat for Humanity at least two weeks out the year. Or to volunteer at public schools on finance and how to become rich and join GS. To immerse themselves in the community by which so much of their wealth comes. But since they already think they are doing Gods work, there is very little chance of this.
All of this are definitional. It is easily changed by changing their culture. If they can't change their culture, then GS needs to be broken up into separate entities. I have not reached that conclusion, yet.
GS' situation in a chess analogy is not a check of the king, but a double-check (checking with a piece that also reveals another checking piece). The criminal investigation invariably follows the civil charge.
Unfortunately, sitting in a senior executive chair automatically removes any credibility of pointing to the lawyer sitting next to you, (the one that you and the board hired), and saying "it's him, not me". They give counsel, they don't make the final decisions.
The decision to fight the SEC charge head-on has to come from the top ranks. You don't get there and get paid that way to dodge the call when it has to be made.
As for GS understanding logic, theory, mathematics, computer science, but not the "real world" - on the contrary, I think the skills that have made them the top company on the street are exactly what they needed to apply in this case - Risk Analysis (and they have prided themselves on it publicly).
They weighed the cost-benefit analysis and the Executive Board decided they are going to fight this one from start to finish. That is why they are in charge - to make that call.
So the reputation of the SEC and GS is on the line big-time. One is going to stand tall, and the other is going to look like crap.
I fully agree. Nitro, I think you are jumping the gun here. While I note your outrage and discontent with this corporate culture you also should respect that GS has not yet been convicted of any crimes. I think if you are very honest to yourself then you will come to the conclusion that you wish GS fall because of jealousy (jealousy to also wanting to belong to the club, not its unethical part but the wealth part) and your natural drive to see the proud and arrogant punished. If you take a step back could it possibly be that you come to the conclusion that before you put Blankfein into the hot seat a lot of other ibank CEOs should be questioned? GS RELATIVE to other entities takes maybe the smallest fault in this crisis. Would you be able to agree on some of above made points?
I believe a big reason why GS is seen by the public as being synonymous with this crisis is its large percentage of Jewish employees, its out-performance over most other banks ("we are smarter than the other"), and its smarts in placing its ex lieutenants in politics, and other power exercising functions. Every other firm could have done the same, every other advocacy could have done the same. From my 10+ years in institutional ibank environments I am personally convinced that the GS environment is more ethical and responsible than all the other banks and hedge funds I have witnessed. Thats my personal experience and I am ok others disagree with that.
I believe a big reason why GS is seen by the public as being synonymous with this crisis is its large percentage of Jewish employees, its out-performance over most other banks ("we are smarter than the other"), and its smarts in placing its ex lieutenants in politics, and other power exercising functions. Every other firm could have done the same, every other advocacy could have done the same. From my 10+ years in institutional ibank environments I am personally convinced that the GS environment is more ethical and responsible than all the other banks and hedge funds I have witnessed. Thats my personal experience and I am ok others disagree with that.