If "everyone" in Goldman management about Fabrice Tourre knew about it, then why didn't the SEC charge ONE SINGLE GOLDMAN MANAGING DIRECTOR with fraud???
Once again, you have proven that you are not the sharpest "tool" in the shed. The issue is not about taking the other side of the trade. The issue is about disclosure. Let me guess. You voted for George Bush, not once but twice. Right?
Fraud is a deliberate misrepresentation, which causes another person to suffer damages. Goldman Sachs deliberately misrepresented the quality of these bonds. It doesn't matter what their prospectus says. If they sold these bonds as being AAA and then shorted them they knowingly misrepresented the quality of the bonds. Who would short an instrument with a AAA rating? I suspect the rating agencies will be dragged into this as well.
I explained earlier what it takes to charge someone with fraud. You need the 9 elements and the court won't accept a fraud case unless you very clearly articulate those 9 elements. It is tough to prove fraud. I believe the SEC's plan is to wait until after the various depositions and subpoena's are filed. The managing directors will be thoroughly questioned during these marathon depositions. More emails will be subpoenaed. Eventually someone will be charged. They probably have a good idea of who they want to charge, but they wont do it until they have convincing evidence so they can satisfy the 9 elements. During a deposition in a civil court case, you can't lie or refuse to answer the questions. If you do, then you risk being placed in jail. Lieing under oath is a criminal offense. The only thing the managing directors can do during such a proceeding is tell the truth or risk being jailed. Everything will come out when all parties are deposed and all of the evidence subpoenaed. Right now, anything that Goldman does to hide or conceal what has happened will put them in more trouble. As the days go forward, more shit will be slung at the wall causing an even bigger mess. The Obama administration will not let Goldman off with a small fine like they usually do. My guess is that they will move forward and aggressively pursue the matter in the courts until all of the shit is thrown against the wall and smeared about resulting in a huge rod through Goldman's heart. Not just stuck in there, but twisted about in a gory mess that will shock the conscience. My conservative guess is that Goldman will probably lose about 25% of its customers, but a more realistic guess is between 50-75%. The fines, litigation, etc. will probably cost Goldman billions of dollars. Goldman's employees will never get a government position ever again. The resulting lawsuit will serve as a severe distraction for management as the shit just keeps getting slung more. Ever try to work with clear thought when someone just served you with a summons and complaint? GS is a buy a 5 bucks I think when the "Fabulous Fab" does a perp walk in the European Union or Germany GS will probably be at its lowest. I bet that Fab will probably serve some time in one of Germany's jails. Maybe Fab might escape the consequences by moving to some small country in Africa or South America...maybe...but most of these countries are very willing to extradite. I wonder if the US might extradite a few US citizens to Germany...
Let me guess, you voted for obama, It is so obvious obama will stoop to any level for his political machine...
GS has more woes. Good thing Lloyd has God's ear. http://www.zerohedge.com/article/germany-add-goldmans-headaches-prepares-sue-firm "Germany To Add To Goldman's Headaches, Prepares To Sue Firm" I seem to recall China refusing to pay Goldman for some energy derivatives bets or something like that a while back. Seems they smelled something was up and said "No way."
Democrats: If it's to big to fail, break it up. Republicunts: If it's too big to fail, shovel taxpayer money into the system. I'm sure this is in some way related to Obama's re-election attempt. He knows Paulson and Bush did some illegal backdoor black mailing of congress and this is going to come out during this investigation. The republicunts and the party of NO are acting antsy about regulating these large banks, Obama is neutralizing the cunts before the legislation begins. It's also a matter of time a nutwing teagagger does a serious criminal act. Then Obama will have a free hand to use the Bush Patriot Act to the fullest extent and neutralize the repulicunt ground game. He'll take a lesson from the health care fiasco where teagaggers were bused around with health care industry funds to bully local residents. This time we can hope he acts rapidly to round up the nutwings and put these criminals in jail where they belong. Also the German taxpayers are not too happy about their own EUR 500 Billion bailout of their banks. The neocon masters of the teagging republicunts are large backers of GS. And they have a very small foot print in Germany. This could get really big.
Your post is a black hole of stupidity... nothing intelligent can escape. Nowhere does it disclose that a competing entity (Paulson & Co) selected the rmbs' that went into the product. No conflict was disclosed; Paulson did NOT sponsor the product, nor did he have any investment in the senior, mezz or equity tranches. He fvcking shorted it! Paulson paid only to structure the fvckers! I don't believe he had an stake in any tranche, but may have taken a token interest, but an infinitesimal-number in relation to the CDS exposure betting it would fail. At least Magnetar invested in the beta-tranche (equity) when buying the CDS kickers. Magnetar's trade was a thing of beauty, but Litowitz is fvcked because he "influenced" the deals. He may have an out because he sponsored the deals in buying the bottom-tranches (equity) for the vol and as a source of funds for the CDS'. The problem in those unrelated deals is that Magnetar tried to influence the structuring. Simple greed, as Litowitz would've done just as well by staying out of the structuring altogether. In Abacus, Paulson and Co did the structuring, which is why there is a fraud charge. The Abacus deals are MUCH worse as Paulson structured and had no equity interest. The fraud lies in the structuring, shorting and non-disclosure related to all of the above. http://www.marketwatch.com/story/goldman-charged-with-fraud-over-paulson-cdo-trade-2010-04-16