While what you are saying is a true statement, it doesn't detract from my point, which is: it is very difficult to bring a negligence suit against an underwriter even in the worst of cases. Here, it has been established that even a well regarded PE shop which is understood to conduct rigourous due dilligence on potential purchases failed to turn anything up. As such I'd imagine that the odds are good that the underwriter has a reasonable case to make that this fraud was above the level of dilligence expected of it. Since this case doesn't even come close to the most egregious catagory of IPO underwriter negligence I'd be surprised if GS takes a serious hit. I guess you are making a statement about legal liability and I'm making a statement about the odds of that liability turning into a fine or settlement. Well, while I agree that no one is booking fake revenues at Refco as with Enron, this 'parking' of a bad debt as a good receivable does have hallmarks of the off balance sheet vehicles favoured by ENE. A quibbling point to be sure, but both involved moving something to a not quite arms length entity to bamboozle the quarter end GAAP cops.
Won't be necessary. The Capital Markets Group that is responsible for two-thirds of REFCO's profitability will no longer be a viable entity. And as I have stated on roughly three dozen occasions here on ET, I believe that the futures business will remain an ongoing concern. The recent interest by Man Financial certainly has the potential to make this a reality.
============ Thats one of the most accurate analysis of the mainstream media there is. CME buyers are doing thier part to help the situation