i apologize if this has already been covered.
i did look thru the list,and did not see it.
just wondering what your opinions are of the wall street mess.



1. This is a weak case. Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no-brainer. The rest is gravy.

2. Robert Khuzami is a bad-***, no-nonsense, thorough, award-winning prosecutor. This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award (1996), for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.”

When you prosecute mass murderers who use guns and bombs and threaten your life, and you kick their ***** anyway, you ain’t afraid of a group of billionaire bankers and their spreadsheets. My advice to anyone on Wall Street in his crosshairs: If you are indicted in a case by Khuzami, do yourself a big favor, and settle.

3. Goldman lost $90 million, hence, they are innocent. This is a civil, not a criminal case. Hence, any mens read — guilty mind — does not matter. Did they or did they not violate the letter of the law? That is all that matters, regardless of what they were thinking — or their P&L.

4. ACA is a victim in this case. Not exactly; they were an active participant in ratings gaming. Look at the back and forth between Paulson’s selection and ACA's management. Fifty-five items in the synthetic CDO were added and removed. Why?

What ACA was doing was gaming the ratings agencies for their investment grade, Triple-A ratings approval. Their expertise (if you can call it that) was knowing exactly how much junk they could include in the CDO to raise yield, yet still get investment grade from Moody’s or S&P. They are hardly an innocent party in this.

5. This was only one incident. The market sure as hell doesn’t think so — it whacked 15 percent off Goldman’s market cap. The aggressive SEC posture, the huge reaction from Goldie, and the short-term market verdict all suggest there is more coming.

If it were only this one case, and there was nothing else worrisome behind it, Goldman would have written a check and quietly settled this. Their reaction (some say overreaction) belies that theory. I suspect this is a tip of the iceberg, with lots more problematic synthetics behind it.

And not just at Goldman Sachs. I suspect the kids over at Deutsche Bank, Merrill and Morgan are working furiously to review their various CDO deals.

6. The timing of this case is suspect. More coincidental, really. The Wells notice (notification from the SEC they intend to recommend enforcement) was over eight months ago. The White House is not involved in the timing of the suit itself, it is a lower-level staff decision.

7. This is a complex case. Again, no. Parts of it are a little more sophisticated than others, but this is a simple case of fraud/misrepresentation. The most difficult part of this case is likely to turn on what is a “material omission.” Paulson’s role in selecting mortgages may or may not be material — that is an issue of fact for a jury to determine. But complex? Not even close.

8. The case looks thin. What we see in the complaint is the bare minimum the prosecutor has to reveal to make their case. What you don’t see are all the e-mails, depositions, interrogations, phone taps, etc. that the prosecutors know about and Goldman Sachs does not. During the litigation discovery process, this material slowly gets turned over (some is held back if there are other pending investigations into Goldman Sachs).

Going back to who the prosecutor in this case is: His legal reputation is he is very thorough, very precise, meticulous litigator. If he decided to recommend bringing a case against the biggest, baddest investment house on Wall Street bank, he certainly has a major arsenal of additional evidence you don’t know about. Yet.

Typically, at a certain point the lawyers will tell their client that the evidence is overwhelming and advise settling. That is around six to 12 months after the suit has begun.

9. This case is political. I keep hearing that phrase, due to the SEC party vote. It is incorrect. What that means is the case is not political, it means it has been politicized as a defense tactic. There is a huge difference between the two.

10. I’m not a lawyer, but . . . Then you should not be ignorantly commenting on securities litigation.

I have $1,000 against any and all comers that GS does not win — they settle or lose in court. Any takers? My money is already in escrow — waiting for yours to join it. Winnings go to the charity of the winner's choice.

Barry Ritholtz is the author of "Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy." His blog is The Big Picture.

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okay..i do have one question
if they are found guilty in civil court,will the next step be criminal court?

G&S are going DOWN for this. I think it will be more spectacular than ENRON myself. They got hung with their own paperwork.

I want the salary and bonuses made during the period of fraud and abuse (say the 8 years leading up to the meltdown) lucre of the senior workers at all the the abusing companies repayed to the american public directly. Yes, I want the money. It should go to U.S. families that were fleeced not to the government.

The last paragraph of this statement is very telling.. Many of the banks that were complicit in the Enron scam are the same ones that helped lead us into this financial collapse..

And you say Goldman is going to lose big? I seriously doubt it..



UC reaches $11.5 million settlement with Goldman Sachs in Enron securities lawsuit

From University of California
February 5, 2008

The University of California announced today (Feb. 5) that it has reached an $11.5 million settlement with Goldman, Sachs & Co. on behalf of investors who purchased the 7% Exchangeable Notes issued by Enron Corp. The plaintiffs had alleged Goldman Sachs violated Section 11 of the Securities Act of 1933 for marketing the notes via a false registration statement. The university filed claims against Goldman Sachs (Case No. H-04-0088) in the U.S. District Court for the Southern District of Texas in Houston in 2004. The Shooters Hill Revocable Trust was also a plaintiff in the case. The settlement has been approved by the UC Board of Regents and is subject to court approval.

The 7% Exchangeable Notes, which were issued by Enron, were exchangeable in to stock of Enron Oil & Gas Co. The settlement covers purchases of Enron 7% Exchangeable Notes from the date of their issuance until Dec. 2, 2001, when Enron filed for bankruptcy.

To date, UC has obtained more than $7.2 billion in settlements for Enron investors, including $2.4 billion from Canadian Imperial Bank of Commerce, $2.2 billion from JPMorgan Chase, $2 billion from Citigroup, $222.5 million from Lehman Brothers, $69 million from Bank of America, $168 million from Enron's outside directors, $72.5 million from the accounting firm of Arthur Andersen LLP, $33 million from Andersen Worldwide, and $10.2 million from the law firm of Kirkland & Ellis LLP. UC has also secured a distribution of $51 million for investors through the bankruptcy proceeding for the LJM2 partnership involved in the Enron scheme.

http://www.enronfraud.com/enr-cgi-bin/mil?templ=news/articles/goldmansachs_settlement.html

actually,i didnt say anything.
i posted the article in hopes of getting more educated replies,so as i could learn a bit.

ty for your reply as well.

my question does still stand unanswered tho.

if GS is found guilty in civil court,will they then be brought to criminal court?

ps,Slowhand..while i agree with you,what are the odds of such a thing happening?

Historically, financial firms settle. They do not want the risk, publicity, and visibility of court action. If GS went in front of a jury and the "payback" measures suggested by Slowhand were presented, there is a good chance they would lose, regardless of how expensive the lawyers were, so they settle.(I don't think it will ever come up.)

They play a game of negotiation and risk management. Court is roulette.

Even murderers cut deals.

If they settle for a fine, it will prolly be less than 1% of what they stole.

Any discussion about the players in the financial meltdown has to lead back to CONGRESS not doing it's JOB of regulating. Someone needs to put ALL of those Congressman that made statements about the soundnes of Fannie/Freddie loans on the hot seat. Those loans are at the core of what really happened and what created the environment in which Goldman could limit losses and profit.

It is a little more than that. Deregulation in the Clinton presidency made all of this come true. Those partly bald Hair Club For Men azzholes of G&S need to serve HARD prison time in say Leavenworth among the population. This BS needs to end! No more power brokers and money men screwing up our economy! No more robbery under the law!

Lotsa luck on that one.

Seems this would be an opportune time to bring up REINSTATEMENT of the first Glass-Stegall Act of 1932 and the later Glass-Stegall Act of 1933 (a/k/a the 'Banking Act') ... you know, the one that mandated the separation of commercial and investment banking in order to protect depositors from the hazards of risky investment and speculation ... the one that was repealed on November 12, 1999, by the Gramm–Leach–Bliley Act. Interesting, ain't it, that REPEAL of Glass-Stegall was led in the House and the Senate by REPUBLICANS (House: Jim Leach, R-IA, and Senate: Phil Gramm, R-TX) - and CLINTON signed it into law November 12, 1999. Who says the 'craps are the only corrupt bastids in politics ... ? Both parties suck when it comes to looking after the best interests of 'We, The People' ... it's only a matter of degree, not of kind.

As much of a novice as I am on this topic, I believe the standard in criminal court would be harder to accomplish (beyond a reasonable doubt).

Can I get a Golden Parachutte?

are you a banker?
do you know any politicians?

no?
then im guessing no parachutes for you....or me..or any of the rest of us regular americans.

ty MsHarmony.
im a bit confused..they apparently Have proof of the conspiracies.
so,again,if they lose the civil,they are found guilty right?

i dont care for this whole "settlement " thingy either.
they stole x amount of dollars,Make them Pay x amount of dollars back?
its not like they dont have the money.

how then,can it not be construed as a criminal act,considering they basically Stole the money,defrauded the investors and tried to cover their ***-ets?

isnt that a Crime?

Now how many of said republicans have jumped ship for the DNC??? On top of that there were measures the Rps wanted and the DNC made it clear, scratch our back, well scratch yours."

not that I am defending the RNC, FAR FROM IT! The RNC is all about the "Share holders." Who are the share holders of the RNC? Big Business. Now Bush wanted to open up new oil drilling, the Dems stopped it. Now Obama is allowing new drilling?

Heck, when it comes to all matters economic the Fed treasury isn't even government, it is industry under the auspices of government. They have enjoyed power above and beyond the law and lead both parties around by their noses. How? Campaign contributions, lobby money, 'special interests' groups... and the list goes on.

The thing is Clinton ratified it happily. BOTH sides want deregulation and a block to voter reforms and campaign reform! Why? They have to answer to their paychecks, not the American people!

So many reforms needed, so much opposition to the things we need to do like clean up our act before spending more money we don't have.

Hell, like any of the media have been truthful about our situation. Depressions are based on GNP and Employment statistics but they are not taking into account a number of factors in their number taking. GMP is tabulated by the raw flow of money and nothing more. The banks make record profits but domestic production in all areas including agriculture are down. Oh but as long as money is flowing who cares?

Unemployment does not take into account, homeless, welfare recipients, Drug addicts, illegal immigrants present or small business loss or self employed people accurately. So as long as Wally World is still hiring who cares?

When you add the hidden factors into the equation WE ARE IN A DEPRESSION BY A WIDE MARGIN AND THEN SOME.

Again who is the real villain here? We the people! Something went wrong when all these Sheeple got it in their heads they could vote themselves entitlements! So how do we deal with a fuqued up mob mentality? Cattle prods and Hob nail boots?