(AP) The new Goldman Sachs world headquarters in the Lower Manhattan area of New York, Friday, April 16,... Full Image
P { MARGIN: 12px 0px 0px } WASHINGTON (AP) - The government on Friday accused Wall Street's most powerful firm of fraud, saying Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail. And fail they did. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co., a hedge fund, capitalize on the housing bust. The Goldman executive accused of shepherding the deal allegedly boasted about the "exotic trades" he created "without necessarily understanding all of the implications of those monstrosities!!!" The civil charges filed by the Securities and Exchange Commission are the government's most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession. The news sent Goldman Sachs shares and the stock market reeling as the SEC said other financial deals related to the meltdown continue to be investigated. It was a blow to the reputation of a financial giant that had emerged relatively unscathed from the economic crisis. Goldman Sachs denied the allegations. In a statement, it called the SEC's charges "completely unfounded in law and fact" and said it will contest them. The SEC is seeking to recoup the money lost by investors and impose unspecified civil fines against Goldman Sachs and the executive, Fabrice Tourre. The SEC could enter into settlement negotiations over the amount if Goldman changed its stance and decided not to fight the charges in a trial. The SEC said Paulson paid Goldman roughly $15 million in 2007 to devise an investment tied to mortgage-related securities that the hedge fund viewed as likely to decline in value. Separately, Paulson took out a form of insurance that allowed it to make a huge profit when those securities' value plunged. The fraud allegations focus on how Goldman sold the securities. Goldman told investors that a third party, ACA Management LLC, had selected the pools of subprime mortgages it used to create the securities. The securities are known as synthetic collateralized debt obligations. The SEC alleges that Goldman misled investors by failing to disclose that Paulson & Co. also played a role in selecting the mortgage pools and stood to profit from their decline in value. Two European banks that bought the securities lost nearly $1 billion, the SEC said.
Nice job there guys, you rip off your investors and still make money. That is the way the world is now. If you have money you can rip people off and get away with it in the name of capitalism.
Steve
------------------ Technology is great when it works, and one big pain in the ass when it doesn't. Detroit iron rules all the rest are just toys.
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08:19 AM
PFF
System Bot
frontal lobe Member
Posts: 9042 From: brookfield,wisconsin Registered: Dec 1999
Criminal behavior is appalling. Glad they got caught and hope they get the maximum penalty.
But your title reflects more on your outlook of life than the actuality of this case.
TWO EUROPEAN BANKS that bought the securities lost nearly 1 billion. Where is that "at the poor expense"?
This was the rich shafting the rich.
You could say, well, the bank stockholders could have been poor people, and now they lost value. Well, the poor could have been Goldman Sachs stockholders, too, then. So if you go by that definition, it would be the poor get richer at the expense of the poor.
This was a case of corporate crime. Why did you try to inject class envy into it when it didn't exist?
Criminal behavior is appalling. Glad they got caught and hope they get the maximum penalty.
But your title reflects more on your outlook of life than the actuality of this case.
TWO EUROPEAN BANKS that bought the securities lost nearly 1 billion. Where is that "at the poor expense"?
This was the rich shafting the rich.
You could say, well, the bank stockholders could have been poor people, and now they lost value. Well, the poor could have been Goldman Sachs stockholders, too, then. So if you go by that definition, it would be the poor get richer at the expense of the poor.
This was a case of corporate crime. Why did you try to inject class envy into it when it didn't exist?
And job losses..
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10:33 AM
84fiero123 Member
Posts: 29950 From: farmington, maine usa Registered: Oct 2004
Well, I'm glad you posted it as outrageous criminal behavior like this deserves the attention. The people working in positions like this DO seem to be the kind of people that would watch their future behavior if this criminal is made an example of.
"( Rolling Stone crafted one of the more vivid denunciations, describing Goldman as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.")"
"Rolling Stone crafted one of the more vivid denunciations, describing Goldman as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
Classic!
[This message has been edited by Boondawg (edited 04-17-2010).]
The rich getting richer at the poor expense? I never could understand this statement. The poor have nothing. The problem is the poor are living off the producers and the rich are living off the producers. The producers are a vanishing class. The rich don't produce, they burden the producers with interest (usery) and they have their high stakes legalized gambling (stock market) where they can tell you a piece of paper is worth $50 one day and then $35 the next.... The government can't produce, They burden everyone with taxes. And the poor go to the government for handouts ie. welfare, housing, medicare, medicade, social security... The way I see it it's us producers that are carrying the load, We create usable products, that people want and need, out of raw materials. and our beloved government is taking away opportunities every single day.
Oh, boy. This is an interesting mix of fact and fallacy:
quote
Originally posted by silver 85 sc:
The rich getting richer at the poor expense? I never could understand this statement. The poor have nothing. The problem is the poor are living off the producers and the rich are living off the producers. The producers are a vanishing class. The rich don't produce, they burden the producers with interest (usery) and they have their high stakes legalized gambling (stock market) where they can tell you a piece of paper is worth $50 one day and then $35 the next.... The government can't produce, They burden everyone with taxes. And the poor go to the government for handouts ie. welfare, housing, medicare, medicade, social security... The way I see it it's us producers that are carrying the load, We create usable products, that people want and need, out of raw materials. and our beloved government is taking away opportunities every single day.
Rich
" The rich don't produce" - Really? They either *get* rich by producing, or they invest in ventures of those who are producing. That's still part of producing.
"they burden the producers with interest (usery)" - OK...if they couldn't charge interest, why would they lend money? If you were rich, would you lend all your money away for nothing? Really? Then what?
"high stakes legalized gambling (stock market) where they can tell you a piece of paper is worth $50 one day and then $35 the next" - *They* can tell you anything they want. It's up to you to believe it, or not. A bit of research will normally tell you what that "piece of paper" is worth. And that "piece of paper" represents something, a share of a company, a quantity of a resource like oil or cattle, and so on.
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02:04 PM
PFF
System Bot
Wichita Member
Posts: 20676 From: Wichita, Kansas Registered: Jun 2002
The rich getting richer at the poor expense? I never could understand this statement. The poor have nothing. The problem is the poor are living off the producers and the rich are living off the producers. The producers are a vanishing class. The rich don't produce, they burden the producers with interest (usery) and they have their high stakes legalized gambling (stock market) where they can tell you a piece of paper is worth $50 one day and then $35 the next.... The government can't produce, They burden everyone with taxes. And the poor go to the government for handouts ie. welfare, housing, medicare, medicade, social security... The way I see it it's us producers that are carrying the load, We create usable products, that people want and need, out of raw materials. and our beloved government is taking away opportunities every single day.
Rich
Excellent explaination.
I heard this statement from a wealth-earned person. Or what we call a self-made millionare:
"The rich get richer because they keep on doing the things that rich people do. The poor get poorer because they keep on doing the things that poor people do."
Think about it.
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02:09 PM
Boondawg Member
Posts: 38235 From: Displaced Alaskan Registered: Jun 2003
Money doesn't make or break character. If you hate someone or are jealous of them simply because they have money, you're not better than a racist that hates someone because they're of a different color.
Oh--don't forget about the guy that stole one of America's largest corporations from it's rightful owners. He reported $5.5 million income on his 2009 tax return.
Goldman will undoubtedly attract more attention when it announces its first-quarter results on Tuesday, April 20. Analysts are predicting revenues of more than $11 billion, and practically half of this amount would be allotted to compensation and bonuses. If this rate maintains, it would equate to $20 billion allocated to pay and bonuses on a full-year basis. The historical peak for compensation was during the boom period of 2007, totaling $18.8 billion.
Perhaps, but who has the most $$$--Goldman Sachs? or the SEC with the full force and assets of the US Govt?
BTW--There will probably be no "conviction". It's a civil lawsuit alledging fraud--not a criminal indictment AFAIK. The Justice Dept has reportedly declined to press criminal charges because, GS hasn't broken the current law. It's a question of ethics, not law--thus the civil suit instead of criminal wrongdoing---so far.
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07:42 AM
82-T/A [At Work] Member
Posts: 23641 From: Florida USA Registered: Aug 2002
Originally posted by maryjane: Perhaps, but who has the most $$$--Goldman Sachs? or the SEC with the full force and assets of the US Govt?
BTW--There will probably be no "conviction".
I don't think there will even be a guilty/at fault finding but I have a different take on it. This is timed just right so as to give Obama ammunition for reform of financial institutions. Which include Executive Order of company take overs. Goldman Sachs executives served in the Clinton White House, and now also serve in the Obama White House Also telling is the Number two contributor to the Obama campaign.
I don't think there will even be a guilty/at fault finding but I have a different take on it. This is timed just right so as to give Obama ammunition for reform of financial institutions.
No doubt about that.
quote
Which include Executive Order of company take overs. Goldman Sachs executives served in the Clinton White House, and now also serve in the Obama White House Also telling is the Number two contributor to the Obama campaign.
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08:07 AM
cliffw Member
Posts: 36387 From: Bandera, Texas, USA Registered: Jun 2003
lol - this thread suffers from extreme stereotyping. people are rich for many reasons. not all of them positive reasons, not all of them negative reasons. if you can judge a person by the size of his wallet - you must really have some skills
yes, the characters which this thread is about are some negative examples of rich folk. and, some have posted some positive examples of rich folk. and there is a huge segment of just plain old decent folk, who happen to be rich in between. and this goes for poor folk too. and middle class folk. and on & on.
this thread is as useless as the them gays, those muslims, them blacks, those illegals, them liberals, those tea partiers, the French...... and - yes - I get wrapped up in stereotyping too.
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10:17 AM
cliffw Member
Posts: 36387 From: Bandera, Texas, USA Registered: Jun 2003
Originally posted by cliffw: When/why did that become a bad thing ? Honest question. I have a reason to ask.
depends on how wide the stereotype rich/poor has little actual basis to stereotype with who is more likely to steal from you - a black person or a rich person? most would say that is an outragous question to ask. we all stereotype. it is how our heads work.
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01:35 PM
cliffw Member
Posts: 36387 From: Bandera, Texas, USA Registered: Jun 2003
"The rich get richer because they keep on doing the things that rich people do. The poor get poorer because they keep on doing the things that poor people do."
