 Goldman Sachs to Pay Record $550 Million to Settle SEC Charges Related to Subprime Mortgage CDOFirm Acknowledges CDO Marketing Materials Were Incomplete and Should Have Revealed Paulson's RoleFOR IMMEDIATE RELEASE
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Barack Obama is tied in pretty tightly with Goldman Sachs
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Stock Market Collapse: More Goldman Market Rigging
By Ellen Brown | |
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Last week, Goldman Sachs was on the congressional hot seat, grilled for fraud in its sale of complicated financial products called “synthetic CDOs.” This week the heat was off, as all eyes turned to the attack of the shorts on Greek sovereign debt and the dire threat of a sovereign Greek default. By Thursday, Goldman’s fraud had slipped from the headlines and Congress had been cowed into throwing in the towel on its campaign to break up the too-big-to-fail banks. On Friday, Goldman was in settlement talks with the SEC.
Goldman and Wall Street reign. Congress appears helpless to discipline the big banks, just as the European Central Bank appears helpless to prevent the collapse of the European Union. . . . Or are they?
Suspicious Market Maneuverings
The shorts circled like sharks in the Greek bond market, following a highly suspicious downgrade of Greek debt by Moody’s on Monday. Ratings by private ratings agencies, long suspected of being in the pocket of Wall Street, often seem to be timed to cause stocks or bonds to jump or tumble, causing extreme reactions in the market. The Greek downgrade was suspicious and unexpected because the European Central Bank and International Monetary Fund had just pledged 120 billion Euros to avoid a debt default in Greece.
Markets were roiled further on Thursday, when the U.S. stock market suddenly lost 999 points, and just as suddenly recovered two-thirds of that loss. It appeared to be such a clear case of tampering that Maria Bartiromo blurted out on CNBC, “That is ridiculous. This really sounds like market manipulation to me.”
Manipulation by whom? Markets can be rigged with computers using high-frequency trading programs (HFT), which now compose 70% of market trading; and Goldman Sachs is the undisputed leader in this new gaming technique. Matt Taibbi maintains that Goldman Sachs has been “engineering every market manipulation since the Great Depression.” When Goldman does not get its way, it is in a position to throw a tantrum and crash the market. It can do this with automated market making technologies like the one invented by Max Keiser, which he claims is now being used to turbocharge market manipulation.
Goldman was an investment firm until September 2008, when it became a “bank holding company” overnight in order to capitalize on the bank bailout, including borrowing virtually interest-free from the Federal Reserve and other banks. In January, when President Obama backed Paul Volcker in his plan to reinstate a form of the Glass-Steagall Act that would separate investment banking from commercial banking, the market collapsed on cue, and the Volcker Rule faded from the headlines.
When Goldman got dragged before Congress and the SEC in April, the Greek crisis arose as a “counterpoint,” diverting attention to that growing conflagration. Greece appears to be the sacrificial play in the EU just as Lehman Brothers was in the U.S., “the hostage the kidnappers shoot to prove they mean business.”
The Nuclear Option
It is still possible, however, for the European Central Bank to snatch Greece from the fire and rout the shorts. It can do this with what has been called the nuclear option -- “monetizing” the debt of Greece and other debt-laden EU countries by effectively “printing money” (quantitative easing) and buying the debt itself at very low interest rates. This is called the “nuclear option” because it would blow up the hedge funds and electronic sharks operated by Goldman and other Wall Street heavies, which specialize in bringing down corporations and whole countries for strategic and exploitative ends.
Will the ECB proceed with this plan? Perhaps, say some experts. It could just be waiting for the German election on Sunday, which the ECB does not want to appear to be influencing.
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are www.webofdebt.com, www.ellenbrown.com, and www.public-banking.com.
www.globalresearch.ca/index.php?context=va&aid=19051
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SEC sends Goldman case to prosecutors
Washington Post Staff Writer
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/29/AR2010042904458.html?hpid=topnews
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Treasury Secretary Taps Fellow Former Goldman Sachs Executive to Oversee Bailout
U.S. Treasury Secretary Henry Paulson has chosen a former fellow Goldman Sachs executive to oversee the disbursement of the $700 billion blank check Congress and President Bush approved for the controversial bailout of Wall Street financial services companies.
The new head of the Troubled Assets Relief Program, as the congressionally blessed, George W. Bush-approved Wall Street welfare program is called, will be Neel Kashkari.
Who?
Neel Kashkari: he was a Vice President at Goldman Sachs before he signed on at the Treasury Department in July of 2006, shortly after Paulson left the firm to head Treasury.
That's right. Just like his current boss, Henry Paulson, Mr. Kashkari was a top executive at Goldman Sachs, the first of what has become a recent cascade of giant financial services companies collapsing under the weight of their bad investments in mortgage-backed securities and their phenomenally imprudent ratios of borrowed money to equity.
Handing oversight of the disbursement of what might very well be more than a trillion dollars to a former Wall Street executive of a firm that failed massively and, more importantly, had been failing massively for a long time before its over-leveraged, highly risky portfolio started coming apart in a very public way might seem to some observers like letting the fox guard the hen house; but that simile is wrong. This is, in fact, the very epitome of handing the fox clear title to the hen house, along with a brand new kitchen with an industrial-strength taxpayer-chicken broiler oven and a dining room table with seating for every other fox in the whole darned country.
Congress, whose members have raked in $43 million in lobbying money and campaign contributions from Goldman Sachs and its bigwigs since 1989, might as well have thrown in a big bouquet of flowers and a string quartet to provide just the right setting for the reckless Wall Street insiders sitting down to their All-U-Can-Eat smorgasbord of taxpayer money roasted and served to the corporate welfare queens of the new American century.
The word "ridiculous" does not even begin to cover what is happening right under our noses on the Wall Street-Washington D.C. axis of big corporation-big government revolving door corruption. This money grab has all the nuance of a tuba ensemble using dual, 10 megawatt amps. Woe be to any average American citizen when that band comes roaring down the tracks Hell-bent for Jubilee Day at the hog-trough of national debt heading for digit counts that overflow scientific calculator displays.
No one can stop this madness: not the tens of millions of voters, not the hundreds of thousands of federal civil servants, not the thousands of federal judges, not the hundreds of purported representatives of the People in the federal legislature, not the heads of the federal agencies, not the two major party candidates, not the President.
U.S. Treasury Secretary Henry Paulson has no need for subtlety, now: he got the money his cronies on Wall Street wanted, he got enough power to dole it out as he sees fit to those high-stakes welfare queens, and now he can put his chosen Igor in charge of slapping together a veritable Frankenstein's monster of consolidated financial power in the hands of the very insiders who killed the industry from which is now being harvested parts for the biggest government-business joint venture zombie in the history of this nation.
And what are the voters going to do about this come November 4? Why, they're going to vote for either John McCain (who has received more than $200,000 from Goldman Sachs and more than $1,800,000 from commercial banks) or Barack Obama (who has received more than $700,000 from Goldman Sachs and more than $2,000,000 from commercial banks), both of whom voted for this cynical horror show.
If there were even a hint of Hollywood-style justice, at the very least, we could get a decent scene where Sarah Palin meets up with the monster in a most undesirable combination of dark hallway, terrifying music, and casting deletions.
Unfortunately, Washington doesn't make horror movies like the ones from Hollywood: for one thing, Hollywood usually eliminates most of the bad actors by the end; for another thing, unlike the show in Washington, Hollywood movies—even the worst of them—always come to an end.
The Dark Wraith yells, "CUT!"
AP/Huffington Post
The government has accused Goldman Sachs of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering.
The Securities and Exchange Commission announced Friday civil fraud charges against the Wall Street powerhouse and one of its executives. The agency alleges Goldman failed to disclose that one of its clients helped create -- and then bet against -- subprime mortgage securities that Goldman sold to investors. In essence, Goldman is accused of pushing a mortgage investment that was secretly devised to fail.
Investors in the mortgage securities are alleged to have lost more than $1 billion, the SEC noted.
The SEC claims Goldman Sachs and one of its top officers misled investors by not disclosing that hedge fund manager John Paulson, who made billions betting against the housing market, selected the assets that went into a complex security called "Abacaus."
Paulson & Co. is one of the world's largest hedge funds, and paid Goldman roughly $15 million for structuring these deals in 2007.
"The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen," finance expert Sylvain R. Raynes told the New York Times about such deals. "When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else's house and then committing arson."
Goldman Sachs shares fell more than 10 percent after the SEC announcement.
The civil lawsuit filed by the SEC in federal court in Manhattan is the government's most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.
A Goldman Sachs spokesman didn't immediately return a call seeking comment. The firm vigorously denied the charges, issuing a statement: "The SEC's charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation."
The agency also charged a Goldman vice president, Fabrice Tourre, 31, who it said was principally responsible for devising the deal and marketing the securities.
The SEC is seeking unspecified fines and restitution from Goldman Sachs and Tourre.
"The product was new and complex, but the deception and conflicts are old and simple," SEC Enforcement Director Robert Khuzami said in a statement.
"Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party."
As the New York Times notes in its in-depth story on the subject, the charges are "the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market." ...
http://www.huffingtonpost.com/2010/04/16/sec-goldman-sachs-charged_n_540377.html?view=screen
April 26, 2010
today's featured
The One Thing
— By Glenn Beck
Why Goldman is willing to take the heat
• Video: Watch Beck's One Thing
http://www.foxnews.com/story/0,2933,591542,00.html
April 26, 2010
Goldman Sachs Suffers
The Perils Of PR Spin
Eric Starkman, Forbes
A bid to twist the truth comes back to haunt the Wall Street giant.
One of the biggest challenges facing a company under fire involves resisting the temptation to downplay the severity of the crisis. There is no shortage of crisis communications advisors who may advocate telling white lies or less inflammatory half truths--a practice euphemistically known as "spin"--but that approach almost invariably makes the situation worse. Goldman Sachs' ( GS - news - people ) misguided PR effort to combat its mounting reputational crisis is a textbook example.
When the Securities and Exchange Commission first unveiled allegations that Goldman had misled investors when it sold a package of risky subprime mortgage-related securities, known as Abacus, the mighty investment bank wasted no time in thundering that the civil allegations were "completely unfounded" and vowing it would vigorously challenge them. A few hours later Goldman issued a second statement, saying that it had lost more than $90 million on the transaction and proffered that it couldn't have honestly believed the investments would fail, given the firm's own exposure.
Quite a few reporters initially parroted Goldman's argument without objectively analyzing it. However, all Goldman's strategy bought the firm was time--not a free pass--as the media wasn't duped for long. Within days, The New York Times reported that Goldman had insurance in place on the Abacus transaction to offset the $100 million loss and, separately, internal Goldman Sachs e-mails made public by a congressional committee also suggested that Goldman had profited handsomely as the housing crisis escalated. The Columbia Journalism Review went so far as to warn reporters to be wary of Goldman's "forked tongue."
In addition to combating charges of fraud, Goldman must now deal with the fallout from being publicly accused of lying. Regretfully, there are now other known incidents of spin that suggest that Goldman views the intellect of Congress and the public as cynically as it did the investors who were long the Abacus deal.
Goldman took out prominent ads in Politico, a newspaper closely read by Washington's political elite, trumpeting itself was the biggest issuers of Build America Bonds; the ads neglected to mention that Goldman earns considerably higher commissions on the bonds than on conventional municipal bonds. Goldman also seems to have leaked a story that it is mulling a requirement to compel its top executives to donate a certain portion of their earnings to charity--an admirable initiative that won't alleviate the public's anger about the firm's perceived ill-gotten gains.
Goldman's lament that the SEC's charges are politically motivated is pretty tenuous. Decrying politics is a tad hypocritical, given that many people believe Goldman's political connections were responsible for Washington making the firm whole on its AIG ( AIG - news - people ) contracts.
Finally, there's the issue of Robert Khuzami, the SEC's enforcement chief and a prosecutor whose credentials include taking on organized crime. Although it's been reported that Khuzami previously oversaw a team of lawyers at Deutsche Bank ( DB - news - people ) who also were closely involved in structuring subprime mortgage-related investments similar to Abacus, Goldman would be wise to resist even veiled attacks on the enforcement chief. Given Khuzami's impressive track record standing up to hardened criminals, the public will likely relish the prospect of a proven legal tough roughing up Goldman's top brass, regardless of the merits of his case.
If Goldman Sachs is to survive this reputational crisis, it will have to devise a more credible strategy that addresses the legal and moral issues relating to its role in the housing collapse. Filing back on deception and playing with the facts could potentially doom the firm.
Here's a secret that spinmeisters will never tell you: When you use spin to minimize a crisis, the crisis almost always spins right out of control.
http://www.forbes.com/2010/04/26/goldman-sachs-spin-personal-finance-public-relations.html
SEC accuses Goldman Sachs of civil fraud
AP – As security looks on, people enter the Goldman Sachs headquarters in the Lower Manhattan area of New … 
WASHINGTON – The government has accused Goldman Sachs & Co. of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was collapsing.
The Securities and Exchange Commission said in a civil complaint Friday that Goldman failed to reveal that one of its clients helped create — and then bet against — subprime mortgage securities that Goldman sold to other investors.
The SEC said the fraud, a blow to the reputation of Wall Street's most powerful firm, was orchestrated in 2007 by a Goldman vice president then in his late 20's. The employee, Fabrice Tourre, has since been promoted to executive director of Goldman Sachs International in London.
Tourre, the SEC said, boasted to a friend that he was able to put such deals together as the mortgage market was unraveling in early 2007.
In an email to the friend, he described himself as "the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!"
A call to a lawyer for Tourre, Pamela Chepiga at Allen & Overy LLP, wasn't returned.
Two European banks that bought the securities lost nearly $1 billion, the SEC said. The agency is seeking to recoup profits reaped on the deal
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.
Goldman, founded more than 140 years ago, built a reputation as a trusted adviser to investment banking clients and for sending top executives into presidential Cabinet posts.
In recent years, it shifted toward taking more risks with its clients' money and its own. Goldman's trading allowed the firm to weather the financial crisis better than most other big banks. It earned a record $4.79 billion in the last quarter of 2009.
Financial analysts said the charges dealt a setback to the firm's standing.
"It undermines their brand," said Simon Johnson, a professor at the Massachusetts Institute of Technology and a Goldman critic. "It undermines their political clout. I don't think anybody really values being connected to Goldman at this point."
He continued: "There are many people who — until this morning — thought Goldman Sachs was well-run."
The civil lawsuit filed by the SEC in federal court in Manhattan was 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 SEC's enforcement chief said the agency is investigating a wide range of practices related to the crisis. The prospect of possible legal jeopardy for other major financial players roiled the stock market.
The Goldman case is unusual because most SEC investigations result in a consent decree in which the investment bank neither admits or denies charges, said John Coffee, a securities law professor at Columbia University, said
"The SEC has changed its style," he said. "They wanted to tell the world what they thought Goldman had done wrong."
Goldman Sachs shares fell more than 12 percent. The Dow Jones industrial average finished down more than 125 points.
The charges come as lawmakers seek to crack down on Wall Street practices that helped cause the financial crisis. Among proposals Congress is weighing are tougher rules for complex investments like those involved in the alleged Goldman fraud.
President Barack Obama vowed Friday to veto a financial overhaul bill that doesn't regulate mortgage-backed securities and other so-called derivatives. Legislation in Congress would for the first time regulate derivatives, whose value depends on an underlying asset, such as mortgages or stocks. Senate Republicans oppose the bill.
The Goldman client implicated in the fraud is one of the world's largest hedge funds, Paulson & Co. 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 became nearly worthless.
ABN Amro, a major Dutch bank, was the biggest loser in the securities, having paid Goldman $841 million, according to the SEC. And IKB Deutsche Industriebank AG, a German commercial bank, lost nearly all its $150 million investment, the agency said. Most of the money they lost went to Paulson in a series of transactions between Goldman and the hedge fund, the SEC said.
The SEC is seeking unspecified fines and restitution from Goldman Sachs and Tourre.
Asked why the SEC did not also pursue a case against Paulson, Enforcement Director Robert Khuzami said: "It was Goldman that made the representations to investors. Paulson did not."
Paulson & Co. is run by John Paulson, who reaped billions by betting against subprime mortgage securities. He is not related to former Treasury Secretary Henry Paulson.
John Paulson was among the first on Wall Street to bet heavily against subprime mortgages. His firm earned more than $15 billion in 2007, and he pocketed $3.7 billion. He has since earned billions more, largely by betting against bank stocks and then buying them back after their shares plunged.
In a statement, Paulson & Co. said: "As the SEC said at its press conference, Paulson is not the subject of this complaint, made no misrepresentations and is not the subject of any charges."
Goldman told investors that a third party, ACA Management LLC, had selected the pools of subprime mortgages it used to create what are known as synthetic collateralized debt obligations. But, the SEC alleges, 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.
"Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party," Khuzami said in a statement.
But Goldman said in a statement that it never mischaracterized Paulson's strategy in the transaction. It added that it wasn't obliged to "disclose the identities of a buyer to a seller and vice versa."
IKB was an early casualty of the financial crisis. It issued a profit warning in 2007 saying it had been hurt by U.S. subprime mortgage investments. IKB was sold in 2008 to Dallas-based Lone Star Funds.
Ed Trissel, a spokesman for Lone Star Funds, declined to comment on the case.
Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, is "pleased that the SEC is departing from the lax enforcement of the Bush administration and is returning to the SEC's proper role of protecting investors in the marketplace," spokesman Steven Adamske said.
The SEC charges come after Goldman Sachs denied last week it bet against clients by selling them mortgage-backed securities while reducing its own exposure to them.
In an annual letter to shareholders, Goldman said it began reducing its exposure to the U.S. mortgage market in late 2006.
April 16, 2010
Timothy P. Carney: Goldman rallies for Obama in Wall Street 'reform'
By: Timothy P. Carney
Examiner Columnist
In his self-styled war against Wall Street, President Obama appears to have a powerful ally: Goldman Sachs.
The nation's largest investment bank, famously cozy with top government officials in both parties, has tipped its hand to its shareholders, indicating that major financial "reform" proposals will help Goldman's bottom line.
"Given that much of the financial contagion was fueled by uncertainty about counterparties' balance sheets," Goldman Chief Executive Officer Lloyd Blankfein and President Gary Cohn wrote in a letter at the beginning of the annual report, "we support measures that would require higher capital and liquidity levels, as well as the use of clearinghouses for standardized derivative transactions."
Goldman's executives are calling for two regulations here. First, they want the federal government to restrict free-wheeling, heavily leveraged, high-stakes financial risk taking. Second, they want government to set more rules of the road for trading derivatives -- financial products that are often complex.
These are the very "fat cats" to whom Obama directed his trash talk in January: "If they want a fight, that's a fight I'm willing to have." Well, it looks like they don't really want a fight. It looks like they want more regulation. The question is: What's in it for Goldman?
If you take Blankfein and Cohn's word, stricter federal liquidity and capital requirements would amount to regulators doing Goldman's work for Goldman. They want Uncle Sam to mitigate "uncertainty about counterparties' balance sheets." That is, they want the government to reduce the risk that Goldman's debtors or insurers will run into trouble.
This is an odd function of government: Making Goldman Sachs feel safer in its business dealings. Blogger Ira Stoll, at his Web site The Future of Capitalism, put it well:
"It's one thing for some elderly retail depositor to ask the FDIC to protect her from risk by guaranteeing bank deposits. But the idea that the government needs to run around setting capital requirements to protect Blankfein and Cohn from the risk that their counterparties might go under or get in a liquidity crunch seems a bit odd. Let them protect themselves."
Also at play in Goldman's call for stricter capital requirements and standardization of derivatives: the confidence game. Much of America has lost some faith in the markets. Regular investors are still a bit scared of the stock market. Financial firms are lending less. Goldman thrives on free-flowing capital.
If Obama signs a financial "reform" and declares that it now safe to enter the waters of the stock market, that's good news for Goldman.
Restoring public confidence in the markets should be the job of those who profit from your investing in the market -- it should not be the job of the federal government.
Another pillar of Obama's financial reform is the "Volcker Rule," which would restrict the trading banks can do. Blankfein and Cohn, in their letter, indicate to shareholders that this rule will be no big deal for them.
The Volcker Rule would bar "proprietary trading" by Goldman (that is trading simply to benefit Goldman's bottom line) but would not restrict dealings "related to" serving the bank's clients. But even Goldman's most notorious financial dealings, transactions with failed insurance giant AIG, were client-related, Goldman told shareholders: "The net risk we were exposed to," Blankfein and Cohn wrote, "was consistent with our role as a market intermediary rather than a proprietary market participant."
In other words, almost any deal Goldman would make could be tied to a client, meaning the Volcker Rule couldn't touch Goldman, even if it cramps the style of smaller, less well-connected banks.
Goldman is lobbying hard on financial regulation, but that doesn't mean they're lobbying "against" regulation. And they certainly shouldn't be considered White House foes: Goldman was Obama's No. 1 corporate source of funds in 2008.
So when Obama triumphantly signs his "reform" later this year, forget the rhetoric and watch the smart money -- it'll be betting on Goldman.
Timothy P. Carney is the Washington Examiner's lobbying editor. His K Street column appears on Wednesdays.
April 16, 2010
Obama's $1M from Goldman in 2008 was a record for any company
By: Timothy P. Carney
Examiner Columnist
President Obama has portrayed himself as the scourge of Wall Street, but that's not how Goldman Sachs's employees and executives saw in in 2008. In his successful White House bid, Obama had no better source of funds: He raised $996,595 from people identifying Goldman as their employer.
Let's put that number in perspective:
- It's the most any politician has raised from a single company since campaign finance reform.
- It was four times what John McCain raised from Goldman.
- It's more than the combined Goldman Sachs total of every Republican in 2008 running for President, House, and Senate.
Letter: Lehman accounting tricks
possibly illegal
In letter, fired Lehman whistleblower calls bank's accounting tricks possibly 'unlawful'
NEW YORK (AP) -- A Lehman Brothers whistleblower warned his bosses that accounting gimmicks the bank used before its collapse may have been illegal, his lawyer said Friday.
Matthew Lee, a former Lehman senior vice president, was fired days after questioning the accounting tricks in a letter to his superiors, attorney Erwin Shustak said. Shustak gave a copy of the letter to The Associated Press.
Lehman Brothers Holdings Inc. imploded in September 2008, becoming the biggest corporate bankruptcy in U.S. history. The collapse sent financial markets across the globe into a free-fall and prompted a massive bailout of the U.S. banking system.
An examiner appointed by the bankruptcy court said in a 2,200-page report last week that Lehman hid its debt and perilous financial condition by using an accounting gimmick called Repo 105. The report revealed Lee's warnings to the bank, though his letter makes public the first internal assessment of the legality of Lehman's bookkeeping.
In a letter dated May 18, 2008, Lee wrote that he discovered that the bank had been underreporting its debt by about $5 billion at the end of each month. Lee, a 14-year Lehman veteran, wrote that he felt compelled to report the "discrepancies" under the firm's code of ethics, saying he believed they "possibly constitute unethical or unlawful conduct."
"I believe the manner in which the firm is reporting these assets is potentially misleading to the public and various governmental agencies," Lee wrote. "If so, I believe the firm may be in violation of the code."
Days after sending the letter, the firm told Lee he was being terminated as part of a general layoff, Shustak said. After his firing, Shustak wrote a letter to the bank saying that Lee "believes he has been the victim of retaliation for bringing what he believed, in good faith, to have been ethical and securities law violations by Lehman."
Lee, 56, later reached a severance agreement with Lehman, however, he stopped receiving payments after the firm's collapse, Shustak said. He has filed a claim with the bankruptcy court to recover the unpaid amount.
The bankruptcy examiner's report and Lee's letter could provide a framework for any future legal action against Lehman executives.
Senate Banking Committee Chairman Christopher Dodd on Friday called for Attorney General Eric Holder to investigate the circumstances that led to Lehman's collapse. A Justice Department spokeswoman said the department would review the request.
The examiner, Anton Valukas, discovered that Lehman put together complex transactions that allowed the firm to sell "toxic," mostly mortgage-backed, securities at the end of a quarter -- wiping them off its balance sheet when regulators and shareholders were examining it -- and then quickly buy them back.
His report doesn't conclude whether executives violated securities laws. It does say that the executives' decision not to disclose the effects of its business judgments appears to be sufficient evidence to support the awarding of civil damages in a trial.
The executives named by the report include former CEO Richard Fuld and three chief financial officers. Fuld has denied knowing what the transactions were or the accounting for them.
Securities and Exchange Commission Chairman Mary Schapiro said Wednesday that the agency is investigating several companies' actions in the run-up to the financial crisis of 2008. She said the SEC's review of the Lehman disaster "has taken us down a path where we're looking broadly" and that Valukas's report will be helpful to the agency in its investigation. She did not name other firms.
http://finance.yahoo.com/news/Letter-Lehman-accounting-apf-358417239.html?x=0
March 5, 2010
AIG AND GOLDMAN SACHS FED FRAUD
Straight from JUDGE NAPOLITANO & RON PAUL!
CLICK > MUST WATCH! < HERE
Listen to this JUDGE!
He puts it all out there as we know it…
who is going to argue with his points!
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Friday, April 30, 1999
Demand Mounting for
Goldman Stock
Bishop Estate stands to prosper
in what is expected to be
one of the largest IPOs ever
New York TimesNEW YORK -- Goldman, Sachs & Co. initial public offering next week is expected to be a smashing success, with demand from fund managers and Internet investors far exceeding the number of shares scheduled to hit the market, sources say. Goldman, a blue-chip investment bank, plans to list its shares Tuesday, formally ending its 130-year history as a private partnership and becoming the last major Wall Street firm to go public. The offering is at least eight times oversubscribed, people close to the underwriting said. "This is not your usual IPO," said Randall Roth of Renaissance IPO Fund in Greenwich, Conn., which hopes to get some allocation of shares from Goldman's underwriters. "Everyone is into this, whether it's tech, growth, micro-cap or big-cap buyers. Even the day traders are interested in this one." The final pricing of the shares will not take place until Monday night, just before the offering. But people close to the deal expect Goldman shares to sell at the top end of the range the firm projected, or $55 a share. If Goldman's underwriters sell an extra tranche of shares held in reserve, bringing the total offering size to 69 million shares, it would raise $3.8 billion, which would rank as one of the largest initial public offerings in history. Even at $55, Goldman's share price relative to earnings would still be lower than its top rivals, Merrill Lynch & Co. and Morgan Stanley Dean Witter & Co. Goldman's underwriters, led by Goldman itself, are determined to price shares at a slight discount to rivals. That is in part because Goldman's earnings are less diverse than those of Merrill and Morgan Stanley, meaning that Goldman might suffer more than its competitors if financial markets took a sharp dive. But Goldman has an almost mythical reputation in some circles. And some potential investors say it is a good buy at any discount to rivals. Investor demand has been strong enough that Goldman can pick and choose the investors it wants to own its stock. Goldman has reserved a big chunk for its own best clients, including big pension and mutual funds that use Goldman services to trade stocks and bonds and its own network of wealthy private clients. Goldman has largely snubbed the huge retail client base of Merrill Lynch, Morgan and Salomon Smith Barney, rival firms that are part of the Goldman underwriting syndicate. Individual investors would have a better shot of buying shares through two Internet brokerage houses, Wit Capital and E*Trade Group Inc., that were awarded an allocation by Goldman, underwriting sources said. * * * * * 
Estate's stake
Kamehameha Schools/ Bishop Estate, which owns about 10 percent of the Wall Street firm, is selling about 9 million of its 30.1 million Goldman shares in the IPO. A $55 share price values Bishop Estate's current total investment at $1.65 billion, or about 3.3 times the estate's initial investments of $500 million since 1992. The estate will raise about $495 million if it sells 9 million shares at $55 each.
Estate trustee Henry Peters told the Star-Bulletin last month that proceeds from the sale will go toward paying off debts and financing expansion at Kamehameha Schools.
After the IPO, the estate will retain a roughly 4.7 percent stake in Goldman.
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February 6, 2010
This Just In: Goldman Sachs Killed AIG
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It will come as a surprise to no one that the firm on the other side of many of those lost bets was Goldman Sachs.
In fact, as Gretchen Morgenson and Louise Story reveal in the NYT, Goldman's hardball tactics and smart bets bled AIG dry.
But don't go blaming Goldman. No one forced AIG to do these stupid deals. All Goldman did was stick it to AIG at the negotiating table and then demand that AIG do what it said it was going to do. The only entity responsible for the collapse of AIG was AIG.
One very interesting nugget in this article: As AIG got more and more distressed, Goldman offered to cancel the insurance contracts AIG had written on Goldman's behalf AND buy the contracts AIG held with other banks at deeply distressed prices. This was presumably before Tim Geithner charged in and paid out those contracts at 100 cents on the dollar.
Although the details of what happened here will have to be fleshed out, it's conceivable that Goldman's offer could have significantly reduced the need for government involvement.
Louise Story and Gretchen Morgenson:
In just the year before the A.I.G. bailout, Goldman collected more than $7 billion from A.I.G. And Goldman received billions more after the rescue. Though other banks also benefited, Goldman received more taxpayer money, $12.9 billion, than any other firm.
In addition, according to two people with knowledge of the positions, a portion of the $11 billion in taxpayer money that went to Société Générale, a French bank that traded with A.I.G., was subsequently transferred to Goldman under a deal the two banks had struck.
Goldman stood to gain from the housing market’s implosion because in late 2006, the firm had begun to make huge trades that would pay off if the mortgage market soured. The further mortgage securities’ prices fell, the greater were Goldman’s profits.
Read more: http://www.businessinsider.com/henry-blodget-this-just-in-goldman-sachs-killed-aig-2010-2#ixzz0lUlk7WvB
BILL MOYERS: Welcome to the JOURNAL.
I sat in a theater packed with passionate moviegoers, every one of them seemingly aghast at the Wall Street skullduggery exposed by Michael Moore in his latest film. It's called 'Capitalism: A Love Story.'
MICHAEL MOORE: We're here to get the money back for the American People. Do you think it's too harsh to call what has happened here a coup d'état? A financial coup d'état?
MARCY KAPTUR: That's, no. Because I think that's what's happened. Um, a financial coup d'état?
MICHAEL MOORE: Yeah.
MARCY KAPTUR: I could agree with that. I could agree with that. Because the people here really aren't in charge. Wall Street is in charge.
BILL MOYERS: That's the progressive Representative from Ohio, Marcy Kaptur, she's with me now. She has a Masters from the University of Michigan, did graduate study at M.I.T. and still lives in the same house in the Toledo working class neighborhood where she grew up.
She's in her 14th term in Congress, the longest-serving Democratic woman in the history of the House, and she's an outspoken financial watchdog on three important Committees: Appropriations, Budget and Oversight and Government Reform.
Also with me is a familiar face to viewers of this broadcast. Simon Johnson is the former Chief Economist at the International Monetary Fund. He now teaches Global Economics and Management at M.I.T.'s Sloan School of Management. He's one of the founders of the website Baselinescenario.com. I check it out daily for Simon's take on the economic and financial crisis.
It's been a year since the great collapse and both my guests are well equipped to assess what's happened since then. Welcome to you both.
MARCY KAPTUR: Thank you.
BILL MOYERS: Let's look at this story that I just read from the Associated Press this week about how Treasury Secretary Geithner is on the phone several times a day with a select group of very powerful Wall Street bankers, especially Citigroup, J.P. Morgan, Goldman Sachs. He will talk to them when Members of Congress have to leave a message on the answering machine. And these are the bankers who helped bring on this calamity and who are now benefiting from it. What does that say to you?
MARCY KAPTUR: That says to me that Wall Street and Washington is a circuit. And because Mr.Geithner headed the New York Fed that that historic relationship, unfortunately, continues. And it gives them special access and special power to influence policy.
SIMON JOHNSON: Well, I think it really tells you how the system works. The system is based on access and is based on what on Wall Street shaping Washington's view of what's important.
It's the people who are very close to Mr. Geithner before when he was the head of the New York Fed. Before he became Treasury Secretary. These people have unparalleled access. And in a crisis, when everything is up for grabs, you don't know what's going on, the people who will take your phone calls, right, in government and people who are going to be standing in the oval office, making the key decisions. That's the heart of the system. That's the heart of how you get your agenda through, by changing their worldview.
MARCY KAPTUR: And they also move people. In other words, Mr. Geithner came from the New York Fed, he came from Wall Street, and he becomes Secretary of the Treasury. His predecessor, Mr. Paulson, came from Goldman Sachs, and he becomes Secretary of Treasury. You can go back decades, and you will see that there's this revolving door between Wall Street and Washington.
And I recently asked Chairman Bernanke of the Federal Reserve, 'Let me ask you a question. Would you be willing to consider a reform where the Cleveland Fed would have equal power to the New York Fed, in terms of how the Fed is run?'
And his answer was, 'No.' ...
CONTINUED (WITH VIDEO) AT
http://www.pbs.org/moyers/journal/10092009/watch.html
MORE DIRTY GOLD TO BE DUG AT...
~ o ~
Check out Germany, UK demand Goldman Sachs probe - Yahoo! News
http://news.yahoo.com/s/nm/20100418/bs_nm/us_britain_election_goldman
Tuesday, April 20, 2010 3:29 AM
From: "Hapa1234"
THE PROJECT FOR A NEW AMERIKAN CENTURY: BORN IN THE USA OR BORN TO LIE & STEAL?
BAND OF USA BROTHERS: DEMOCRACY - HYPOCRISY - KLEPTOCRACY!
Ref: Former U.S. Office of Budget and Management - Former White House Chief of Staff - Former GOLDMAN SACHS LONDON GOVERNMENT AFFAIRS DIRECTOR: JOSHUA BOLTON [AIPAC son of former CIA Agent: Seymour Bolton visa former CIA Director - U.S. President: George H.W. Bush [Carlyle Group] with Dr. Strange Love, aka, The Kissinger of Death Associates [9/11 WTC Commission "Report"].
STILL BLINDED BY BROKEN TRUST LIES? SIR NO SIR!
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