Securities Exchange Act of 1934
Rule 10b-5 — Employment of Manipulative and Deceptive Devices

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

a. To employ any device, scheme, or artifice to defraud,

b. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

c. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,

in connection with the purchase or sale of any security.

The key to this rule has always been “omit to state a material fact.” Such as the fact that these firms were paying off the ratings agencies to give the appearance of less risk. One can argue that the big pension funds are big boys who can take care of themselves. However, that is not the law and hasn’t been for 75 years. Also, many purchasers are not in the business of doing full due diligence on these securities. That is the role of the ratings agencies. Last, GS and DB had actual knowledge of the falsity of the statements made and the omissions made. This is an easy case.

That doesn’t mean that anyone will suffer legal consequences. Wall Street will get a slap on the wrist just like it did after all the fraud in 1997-2000.

“Sorry. It does not cut it. The bankers created this crap, they were the ones who were in the know and they knew how to trade this baby both up and down. They did not give one fuck what happened to the various “clients” who got screwed over because, like you, they rationalized some “buyer be aware” bullshit to justify their actions.”

Just debating the argument brother, nothing personal. Merry X-Mas to you and yours. You may be right from an ethical standpoint but from a strictly legal point of view I may be too. Have a good one.

Well- its one thing to hedge- another thing entirely for GS to bet against a product they were instrumental in creating- and so therefore- have substantially more information and knowledge than the poor fools who relied on bogus ratings from the rating agencies-

not cool-

a simple note such as the following- “Disclaimer: GS is positioned so that it benefits when this product decreases in value.”

At the jam-packed mall doing the last-minute thing.

Merry Christmas to everyone. (Except GS)

Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries. These responsibilities include:

Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;

Carrying out their duties prudently;

Following the plan documents (unless inconsistent with ERISA);

Diversifying plan investments; and

Paying only reasonable plan expenses.

The duty to act prudently is one of a fiduciary’s central responsibilities under ERISA. It requires expertise in a variety of areas, such as investments. Lacking that expertise, a fiduciary will want to hire someone with that professional knowledge to carry out the investment and other functions. Prudence focuses on the process for making fiduciary decisions. Therefore, it is wise to document decisions and the basis for those decisions. For instance, in hiring any plan service provider, a fiduciary may want to survey a number of potential providers, asking for the same information and providing the same requirements. By doing so, a fiduciary can document the process and make a meaningful comparison and selection.
http://www.dol.gov/ebsa/publications/fiduciaryresponsibility.html

..The courts stringently examine transactions between people involved in fiduciary relationships toward one another. Particular scrutiny is placed upon any transaction by which a dominant individual obtains any advantage or profit at the expense of the party under his or her influence. Such transaction, in which Undue Influence of the fiduciary can be established, is void.

West’s Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
http://legal-dictionary.thefreedictionary.com/fiduciary

..reasonable care n. the degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances. This is a subjective test of determining if a person is negligent, meaning he/she did not exercise reasonable care. (See: negligence, duty of care)
http://legal-dictionary.thefreedictionary.com/reasonable+care

MA,

your ‘locking of your bike’ demonstrates ‘reasonable care’..

but, you jeremiad on ‘libertarianism’ is non-responsive.

I wasn’t saying that there was ‘no crime committed’. I was saying that, in this instance, the # of criminals, being counted, is too few..

and, with that, these Pension Fund ‘Managers’ are culpable, as well..

or, if they are not, they should be lining up to press their Case, in Courts (are they?, in any large #?)

they, the PFMs, were part, and parcel, of the syndicate that led to these ‘losses’ being stuffed into JohnQ’s PF..

this – this system there was a foul (conspiratorial collusion between the banks/ratings agencies/mortgage originators to create and trade in fraudulent securities), and a crime (securities fraud).

leaves out those playing the Role of ‘Safeguard’–Paid ‘Professionals’ engaged under the guise of Fiduciary Responsibility.

A different, higher, standard applies to them, they Failed, they’re part of the Problem, no a ‘victim’ of it..

As I was saying, those Incompetents are going to be the last ones, if at all, to see the Light shine on them.

again, ..if JohnQ had the first inkling of how his ‘Fiduciary interests’ were, absolutely, s***-canned, there’d be an, unprecedented, ‘rush to the Exits’..

and be a major plank of a ‘tax revolt’ when the “lost billions of dollars” come home to roost in the form of requests for higher taxes to make those “Pensions” whole..