Reading the SEC complaint (SEC vs GOLDMAN SACHS & CO. and FABRICE TOURRE) makes it hard to avoid the conclusion that there were material misstatements of facts and significant omissions performed in the selling of the Abacus 2007 securitized product.

When you consider the factors surrounding the complaint, it raises a dozens of more questions:

A Bakers Dozen: Questions Provoked by the SEC Goldman Complaint

1. Was this a one off at GS, or are there other CDOs that were sold via Fraud and Misrepresentation?

2. How endemic is this practice on the Street? Did other big derivative underwriters — Merrill, Morgan, Lehman, Deutsche, etc. — engage in similar (alleged) fraudulent practices when they were constructing and marketing these derivatives?

3. Who brought the issue to the SEC’s attention? Was it ACA, who lost 900 million dollars? Or was it other investors in the pool?

4. What does this say about the White House and Wall Street? Are the gloves off? Has the public outcry now reached the point where we might see vigorous prosecution of Wall Street wrongdoing?

5. Paulson & Co. were not named in the litigation. Did they do anything wrong? Might they get drawn into the fight?

6. Are there other hedge funds who engaged in similar behavior: Helping to select the components of a synthetic CDO, which they then shorted? Are there similar disclosure and misrepresentation issues?

7. How does this impact the Financial Reform legislation snaking its way through Congress? Will this add momentum to the call for stronger regulation of the Street? Of Hedge Funds?

8. Will this finally move derivative reform — exchange traded, full transparency/open interest, counter party disclosure, reserve requirements, perhaps even overturning CFMA — forward?

9. What does this mean for the markets? For much of the rally, Financials have been a leading sector. Might this derail the upward momentum?

10. Was the timing of this legal action a coincidence? Did the SEC / WH purposefully release this news to put heat onto those opposing reform?

11. What does this mean for ‘Government Sachs‘? Might GS see their privileged positions within Governments (US and others) curtailed?

12. How much will this end up costing GS? Is it a few million dollars disgorgement of a fee, and a similar penalty, or can this possibly spiral to a billion dollar bottom line hit?

13. Will there be criminal charges against GS or Tourre or anyone else involved?

I do not know the answers to these questions yet, but I do have my suspicions. . . .

Category: Derivatives, Legal, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

52 Responses to “Questions Surrounding the SEC’s Litigation vs Goldman”

  1. buckykatt says:

    I would venture a guess that criminal charges will follow, as will more civil charges.

  2. Transor Z says:

    #3. Paulo Pellegrini’s name is getting batted around, but who knows?
    http://nymag.com/daily/intel/2010/04/paolo_pelligrini.html

  3. snapshot says:

    http://blogs.reuters.com/felix-salmon/2010/04/16/goldmans-abacus-lies/

    Felix Salmon

    “And although ACA should never have been so passive in terms of accepting names given to it by Paulson, it did reasonably believe, because it was essentially lied to by Goldman Sachs, that Paulson was in the deal to make money on the long side.”

    Didn’t they therefore believe they were going along with a shrewd market dealer – not knowing he was interested in the trade for purely different reasons?

  4. Mike in Nola says:

    I’m sure this happens a lot more than we will ever find out.

    These investors who got burned were likely big boys who could take care of themselves, but possibly not. We have seen over the past two years that pension funds are not what we’d call sophisticated investors, although they should be. From what I’ve read, I’m sure this happens to the small fry all the time as brokers are pressured to unload whatever the house wants to sell, but they just get swallowed up in the mandatory arbitration system that all clients have to agree to in order to get an account anywhere. I still remember an old IRA back from the 1980′s with a local bank. (best investment I ever mader – 25 year zero coupon treasuries paying 8%). Anyway, they didn’t have an arbitration agreement when I opened the account. After Bank One took them over, I got one every month in the mail for years til I moved the bonds elsewhere.

    From my limited knowledge of the SEC regs, GS probably faces little more than a slap on the wrist. The way to cure this behavior is to impose a fiduciary duty on the financial houses and to subject them to lawsuits for breaching it. Nothing like fear of an angry jury to make people walk the straight and narrow.

  5. ezrasfund says:

    #10 This oft repeated question has it backwards. The cry for financial reform was bolstered by the claim that the agencies which are supposed to regulate the market and enforce those regulations have failed to do their job. As the SEC and the Fed prepare to defend their turf from those who want to create a new agency that does a better job, they now have this action (and others on the way?) to bolster their claim that they are doing the job and the structures in place are adequate for the task.

  6. hue says:

    one question i have (since i haven’t read “The Best Trade Ever” or “the Big Short”) is who are the counter parties to John Paulson and Magnetar? in all the news and blog coverage about Goldman and the SEC, people talked about Paulson and Magnetar making bets against mortgage bonds and CDOs. but through what vehicles? who paid them off? There are two sets of suckers for this trade, the investors in Abacus and the sellers of the CDS to Paulson, unless the suckers are one in the same. what is the need of creating Abacus where Paulson can just simply buy CDSs from whomever on various mortgage bonds.

    it appears to me that Abacus itself was a CDS, which was marketed as a CDO. (Joe Nocera said Abacus contained CDSs, referencing a Gretchen Mortgensen and Louis Story article in December http://nyti.ms/aE0frv) In essence, was Paulson paying a premium to the CDS (Abacus) and the Abacus investors received those premiums disguised as interest payments. then when the handpicked reference bonds went south, Paulson was paid with the money investors used to purchase Abacus?

    In the ProPublica stories, Magnetar bought some of the equity tranches in the CDOs, which then is used to fund Magnetar’s premium payments on CDSs. But who sold Magnetar the CDSs? who paid Magnetar when those CDOs went bad? ProPublica said AIG was not the counterparty to Magnetar’s CDSs. http://bit.ly/9PCsgB

    Dylan Ratigan yesterday said AIG and taxpayers were on the hook for the Abacus trade, but I think Ratigan is incorrect. AIG had stopped selling CDSs in 2005, well before the Abacus and Magnetar trades.

  7. b_thunder says:

    12. How much will this end up costing GS? Is it a few million dollars disgorgement of a fee, and a similar penalty, or can this possibly spiral to a billion dollar bottom line hit

    – In a “normal world,” even if GS was found not guilty on all counts and didn’t have to pay any fines, this would still cause an enormous hit to Goldman’s reputation. In a “normal world,” after this a pension fund manager wouldn’t want to be see making deals with GS. But we live in the “interesting times” as Chinese like to say, when the sound of Goldman’s pitch, the texture of their paper and the site of their PPT presentation acts on the poor buy-siders as Kryptonite…
    However, even though I think the impact on GS will be minimal, I will not be buying their common. And anything else that GS is selling.

  8. hgordon says:

    This blog post highlights Goldman’s defense -
    http://www.businessinsider.com/goldman-releases-second-statement-2010-4

    Basic argument is that ACA did not blindly accept Paulson’s recommendations, but rather that they were ultimately responsible for the portfolio selection, so disclosure of Paulson’s involvement wasn’t material. GS also claim that they lost $90 million on the transaction, though it’s somewhat difficult to believe that they didn’t hedge the position, so maybe the $90m isn’t the whole story.

  9. engineerd1 says:

    I have no doubt this will have legs, because its powered by the pitchfork-toting mob. To me its a case of buyer beware, in this case sophisticated buyers intentionally buying junk to get its high yield. As soon as you have a market you will have people on both sides of the bet taking their best shot. As an investor, if I know I am buying clearly described junk, up to a point it matters to me not a whit how the junk was selected, or who did it. When I hear more about this selection process I may change my mind, but I doubt it. Unless Paulson tried to sabotage the real estate market in very specific ways to effect specific tranches, they are as innocent as lambs, in my opinion. The villian here is collective human greed, but if I am forced to be more specific my favorites are liberal dolts in both political parties who think you can make a man whole buy giving him something he has not earned, and/or cynically buy votes with bread and circus. This charade is designed to gain footing with the mob, lost through the health care fiasco and it will acheive its goal.

  10. constantnormal says:

    1) Yes. To both questions.

    2) Yes again. Defrauding the customers has been common practice for years. Check the validity of any brokerage recommended list.

    3) Probably a democrat poll-monger. This is about altering public perceptions, and has nothing to do with justice or guilt vs innocence.

    4) Nothing. They are still in bed together.

    5) Yes, constructing a financial entity, whether directly or indirectly, and then selling it short is fraudulent behavior. Same thing as the difference between shooting your neighbor and hiring a hit man to do so.

    6) Lots of them, as several have made their way into books and magazine articles. There is not much required by way of investigation, as most/all of the groundwork has already been done. That does not mean that we will not see botched investigations, as the goobermint is heavily conflicted when it comes to biting the hand that pays them.

    7) Might muzzle the Republicans a bit, but it will do nothing to influence the content or passage of ineffectual legislation. The singular thing that will bring a serious tone to goobermint righteousness is for a ton of Republicrats to get tossed out in the November elections.

    8) Nope. See answer to #7.

    9) Nothing. Upward momentum will not be derailed, unless GS decides to activate their Doomsday programmed trading machine. With half of the daily NYSE volume being done by bankster traders, so long as they want the markets to go up, the markets will go up.

    10) Nope. You got the truth in the second part of your question.

    11) Nothing. Business as usual. GS will prosper from this, due to their CDS short position on their own shares, which will remain opaque in order to prevent shareholder lawsuits.

    12) GS will PROFIT from this, due to their use of credit default swaps to bet against their own stock, and insider knowledge of the coming suit from their many sources within the SEC, Treasury, CFTC, Fed, etc. The profits will be disguised as “trading” profits, to preclude stockholder lawsuits. The less transparent, the better, so far as GSA is concerned. (tin foil hat on, conspiracy theory mode engaged — try and prove me wrong)

    13) Of course not — people could go to jail if that ever happened, and the Doomsday Programmed Trading Algorithms would be unleashed (UNLEASH THE KRAKEN!).

  11. Ignim Brites says:

    If the Dems are going to make beating up Wall Street central to their strategy to retain the House, think Enron, think Arthur Anderson. Maybe its Chicago vs New York.

  12. VennData says:

    On that funeral day would occur
    An apt gravestone we all would concur
    Here lies Lloyd Blankfein
    Friend, yours and mine
    Who finished off Caveat Emptor

  13. Marcus Aurelius says:

    The culpable will be exposed for their parasitic greed as the unwinding takes place (and it has only just begun). The bodies aren’t buried very deeply, as is evident by both the stench and the bones protruding from the ground. Most likely, this is the first in a long line of corpses that will be exhumed, identified, and unceremoniously cremated at an undisclosed location by parties unknown.

    That this is a civil action (and as fraud is covered under both criminal as well as civil statutes), speaks volumes regarding how serious law enforcement is about cleaning this graveyard up and punishing those responsible.

  14. Blurtman says:

    14.) What did Hank Paulson know, and when did he know it?

  15. Tarkus says:

    GS’s reputation was flushed down the toilet by the current (and just preceding) management. Another question to ask is: Did Goldman take their knowledge of Paulson’s intentions to make their bets against what they were selling? Their NET position in total might hold an answer, not the measly few million they lost in the actual fund. And when you are providing payment to those who rate what you float, is it any wonder that the ratings system is captured? Cassano at AIG was a useful idiot, as were all clients GS unloaded on. Potential future clients will all take note of how they will be dealt with. If they are wise, they will not play the Street-Card-Monte with any of these firms.

  16. VennData says:

    And another question, how the hell do you pronounce, “Eyjafjallajokull?”

    http://www.youtube.com/watch?v=9jq-sMZtSww

  17. Bud Fox says:

    Interesting that Bear Stearns turned down this deal on ethical grounds…I was surprised to read that, I didn’t think there was a deal that Bear would not do.

  18. theobannion says:

    Can’t say much about most of the points, but jail time? Are you kidding? You’ll see a US president jailed before any of the Capos at GS are allowed to miss a haircut.

    Best,
    SOB.

  19. Is this just a straw man to placate the angry mob?

    Will this open up GS to investor lawsuits? This is what I want to know. The government fines are a flesh wound. Even if management has to go they are already stinkin’ rich and will probably just go work for another team or possibly a shadow institution they already set up to replace the GS straw man (this is possibly all just an excuse to exit stage left without the rubes’ eyes following them).

    Investor lawsuits could be where the rubber meets the road if they happen. I hope they happen.

  20. tmcinerney says:

    Burn GS and other babies, burn!

  21. Moss says:

    Can it also be asked if mere enforcement of the rules by non-captured regulators can do much to prevent bubbles? If the SEC, the OTS, FDIC, FINRA, NYSE, etc… and the Fed enforced the goddamn rules and did not let ideology, and politics play the prominent part it has over the last 20 years would we be in this mess.

    Bubbles are always accompanied by, if not caused by fraud. Not responding to the early indications of it simply propagate it. Markets can’t self regulate since people make up markets and people are motivated by greed.

  22. bsneath says:

    My sense is that most of Main Street has been somewhat indifferent to the machinations of Wall Street. These folks for the most part are not active investors. The connections between falling housing prices, job losses and complex investment banking products is difficult for many to discern.

    But Main Street carries a strong sense of right from wrong. Their “moral code” is irrespective of pages of disclaimers and the ultimate legal outcomes. As they are bombarded with more and more instances of insider trading and stacked-deck deals, they will connect the dots and the popular tide will shift from one of mild upset to anger and rage.

    Wall Streeters would be best served to clean up their act and enforce a code of ethical behavior before the pitchforks come out and criminal indictments & punitive measures gather momentum. Those who were the leaders during the “anything goes” era need to fall on their swords and quietly move on to new philanthropic endeavors.

  23. Winston Munn says:

    Having killed off legions of various celluloid fanged spookies, it should come as no surprise that the light of day is also harmful to vampire squid.

  24. cognos says:

    Why does the SEC make this high-drama? (Friday, before earnings, “SEC charges Goldman with fraud!”)

    Wasnt the product involved a $1B synthetic CDO (thats tiny)? GS earned $25M in fees. Legal disclosures and disclaimers were all in place, right?

    First, GS is/was not particularly large in CDO/ABX space. If GS did a few $B of these… Bear, Lehman, Merrill, Deutsche and Citi each did about 5x whatever Goldman did, right? Their associated clients… anyone who bought ANY of it… had 5x magnitude losses. GS tends to have cleaner inner-workings that the other banks. Better ethical standards.

    But at the end of the day, clients WANTED to buy this product. And the losses were caused by the HOUSING BUBBLE. Not by the “selections influenced by Paulson”. So I find that a meaningless point. No one “knows this stuff is toxic”. Thats just lunacy. “Toxic” stuff that was priced at $1, 2, 3 a year ago… returned 500%, 1000%, some things MORE… the future is uncertain! Welcome to financial markets.

    SEC… what are you doing? You are as incompetent at follow-up regulation as you were in 2006, 07, 08. Total incompetence.

  25. Cynic_FA says:

    #1 What other shady dealings have GS been involved with?

    Goldman press release(@hgordan 11:40 am) says that Abacus was not created as a vehicle for GS to short housing. OK, What were the transactions created for Goldman to short the mortgage market and who were the victims / counter parties?

    CNN commentary emphasized that GS fee was only $15 million on Abacus. People are not focusing on the real money: Ask the SEC or Senate inquiry to demand disclosure of GS fees for 2007 / 2008 from all the Paulson deals. Show me the real money! What were the trading profits on both sides of all the trades GS arranged for Paulson? This is the $5 billion question; show me the trading profits.

    GS arranged a trade for Paulson ( the favored client) and set up ACA / IKB (the patsy or fish) to take the fall. Every potential client for GS ( and the other big banks) should ask themselves “Am I the favored client in this transaction, or am I the patsy?”

    There is an old saying in poker: “When you sit down at a table and you can’t tell who the fish is, the fish is you!”

  26. Blurtman says:

    theobannion Says wrote:

    April 17th, 2010 at 1:00 pm
    Can’t say much about most of the points, but jail time? Are you kidding? You’ll see a US president jailed before any of the Capos at GS are allowed to miss a haircut.

    Best,
    SOB.
    **************

    How about a recent former Treasury Secretary?

  27. riffraff says:

    I have two questions:

    First, does the “Fabulous Fab” rat out his accomplices, I mean, his superiors?

    Second, does the Chief Executive Vampire Squid get pushed, I mean, fall onto his sword?

  28. jpm says:

    # 5 Paulson & Co. were not named in the litigation. Did they do anything wrong? Might they get drawn into the fight?

    Yes. Conspiracy to defraud will ensnare them. They might as well start leaving the country.

  29. Tarkus says:

    riffraff Says:
    First, does the “Fabulous Fab” rat out his accomplices, I mean, his superiors?

    Agreed. That should be good reading. I wonder if he used the word “monstrosities” to describe what GS was selling in the prospectus.

    With the ratings agencies paid-off to by the originators to paint lipstick on the pigs, the whole setup was fraudulent from the outset. To say “they should have known better” is an argument to legalize all fraud, whether its automobiles or financial products, because after all, everyone should always know better.

    The derivatives magnified the mortgage crises. If the loans were made the old fashioned way where the bank held onto it, instead of Wall St’s “financial innovations”, the results would not be nearly as bad because it wouldn’t have ballooned.

    If you are a company or a country (Greece), there is only one lesson you could have learned from this.

  30. VennData says:

    I really could care less about this list of questions. I’m primarily concerned with this lawsuit’s affect on the upcoming legislation’s language relating to financing abortions.

  31. mbelardes says:

    I don’t see why Paulson should get drawn in unless they also made severe misrepresentations to ACA.

    Keep in mind this transaction closed in April 2007, when the bulls were stull running for mortgage/credit backed garbage.

    Paulson betting against this stuff in early 2007 would be like me betting against Apple right now, only more people are probably betting against apple. So if all he did was tell Goldman what he was interested in betting against and GS/ACA thought he was crazy and made the trade happen, then I find no fault with that. (Again, assuming he didn’t tell ACA he was purchasing that stuff too or something).

    We can’t fault Paulson for going against the flow on this stuff and searching out parties willing to take his bet. But we can fault Goldman for knowingly selling shit to ACA and telling them the guy that shorts bonds is actually in on this deal. That is fraud, plain and simple.

  32. bmoseley says:

    didn’t Paulson & Co participate in ‘insider-trading’.

  33. riffraff says:

    bmoseley Says: didn’t Paulson & Co participate in ‘insider-trading’.

    That’s what Bill Black suggests, that if Paulson knew that Goldman was misrepresenting Abacus 2007, then Paulson & Company could be considered co-conspirators.

    http://www.ritholtz.com/blog/2010/04/bill-black-and-i-react-to-goldman-fraud-charges/

  34. scharfy says:

    Will the Germans sue Goldman and kick their ass out of Germany? Merkel is saber rattling.

    After the Greek currency swap fiasco which the Germans will finance the wreckage of, and then Fabulous Fab blowing up German banks…

    they gotta be getting tired of our structured products.

  35. Cynic_FA says:

    BR,

    You may have missed the biggest question. Think Watergate:
    “What did the president know and when did he know it?

    I am not close enough to Wall Street, but, it seems very likely that Tourre was not the top person to authorize this scam transaction. Was the head of the Correlation Trading Desk in the know? What top directors or committee were involved in the whole series of Abacus Transactions?

    Reading the SEC complaint it seems that every Abacus deal was synthetic – basically no real mortgages involved. They were just a form of betting with one side taking the long position and another side taking the short position and the reference CMO’s were just the cocks fighting in the ring. Every Abacus deal therefore involved a short player and a potential conflict of interest or incentive for fraud.

    Maybe when we think of Goldman Sachs in 2012 we will compare them to Arthur Anderson. An accomplish to a giant fraud who had to be put out of business. The populist crowd screams to the SEC for lifetime bans from the industry.

  36. philipat says:

    Not mentioned is the reputational damage which will happen every day this goes on, possibly for over a year? If I were GS, I would settle as soon as possible. This could be the single largest damage to GS longer term.

    It does,hopefully mean that meaningful reform might now be possible. If the noise back home is resonating, all the lobbyist money in the world doesn’t have as loud a voice?

    The financials account for the greatest part of the earnings growth of a projected 20% in ’10. Without financials, earnings groth is only 5%, which means the market overall is overvalued by 25-30%. Indeed it is very likely that other WS firms will suffer similar problems BUT that doesn’t NECESSARILY impacy earnings as such. The question is, will this have a longer than transient impact on market psychology rather than on earnings at the financials?

  37. Jim Bianco says:

    BR

    Some answers

    1. Was this a one off at GS, or are there other CDOs that were sold via Fraud and Misrepresentation?

    Abacus had 23 deals in total between 2004 and 2007. The deal in question (2007-AC1) was the second to last in this series

    2. How endemic is this practice on the Street? Did other big derivative underwriters — Merrill, Morgan, Lehman, Deutsche, etc. — engage in similar (alleged) fraudulent practices when they were constructing and marketing these derivatives?

    This was pretty much standard operating procedures. What this case representation is the evantually criminalization of the way Wall Street in this field.

    3. Who brought the issue to the SEC’s attention? Was it ACA, who lost 900 million dollars? Or was it other investors in the pool?

    Paulson had a falling out with his chief trader Paolo Pellegrini. He is understood to be the source.

    4. What does this say about the White House and Wall Street? Are the gloves off? Has the public outcry now reached the point where we might see vigorous prosecution of Wall Street wrongdoing?

    Yes

    5. Paulson & Co. were not named in the litigation. Did they do anything wrong? Might they get drawn into the fight?

    Paulson did not market this CDOs to the public and therefore made no misreprenstaions.

    6. Are there other hedge funds who engaged in similar behavior: Helping to select the components of a synthetic CDO, which they then shorted? Are there similar disclosure and misrepresentation issues?

    If they bought Synthetic … all of them. This is how this business worked.

    7. How does this impact the Financial Reform legislation snaking its way through Congress? Will this add momentum to the call for stronger regulation of the Street? Of Hedge Funds?

    You answer this on Yahoo Tech … yes

    8. Will this finally move derivative reform — exchange traded, full transparency/open interest, counter party disclosure, reserve requirements, perhaps even overturning CFMA — forward?

    Probably

    9. What does this mean for the markets? For much of the rally, Financials have been a leading sector. Might this derail the upward momentum?

    Not good when the leading sector takes a body blow like this.

    10. Was the timing of this legal action a coincidence? Did the SEC / WH purposefully release this news to put heat onto those opposing reform?

    Yes

    11. What does this mean for ‘Government Sachs‘? Might GS see their privileged positions within Governments (US and others) curtailed?

    Think Solly in 1991. When they were busted corner the May 1991 2-year note. The complaints and lawsuits bleed them of money and resoruces. In 1994 their were sold to Citi and disappeared as a division of them. Over time the same will happen to Goldman (unless they beat this case).

    12. How much will this end up costing GS? Is it a few million dollars disgorgement of a fee, and a similar penalty, or can this possibly spiral to a billion dollar bottom line hit?

    Many billons when all the acutal and punitive damages are totalled. remember Abacus had 23 deals alone and they have other series as well.

    13. Will there be criminal charges against GS or Tourre or anyone else involved?

    Yes, and next to fall is his boss – managing director Jonathon Egol

  38. bsneath says:

    At this point Goldman Sachs needs the endorsement of the Pope to restore its credibility…..uh, on second thought, cancel that idea….

  39. Sam says:

    The SEC filed the lawsuit on Friday without giving Goldman the heads up. When a company receives a surprise subpoena or a lawsuit on a Friday, it is known as the “kiss of death” from the SEC. (I received my first SEC subpoena on a Friday afternoon, back in the day). It is meant to ruin your weekend plans (yes, the SEC can get personal in its own way), since your lawyers usually don’t work weekends.

    Goldman compounded its problem by putting out a misleading press release contesting the SEC’s charges. That press release can be the basis for later 10b-5 violations, if the SEC wins its case against Goldman.

    Goldman should not engage in a public debate on this issue, if they want to avoid being baited by the SEC.

  40. Cynic_FA says:

    Thanks to Jim Bianco (is that the real market technician?) for what sounds like an informed response and expansion on the way wall street does this business.

    I followed the name Jim mentioned: Jonathon Egol and found this post from NYmag talking about how Jonathan Egol pioneered the securities to allow clients to short the same mortgage securities GS was selling to other clients. http://nymag.com/daily/intel/2009/12/goldman_trader_jonathan_egol_h.html#comments

    Also mentioned Greg Lippman who is said to have passed out t-shirts saying “I am short your house”

  41. [...] at The Big Picture, Barry Ritholtz lists a dozen questions (a baker’s dozen, actually) the fraud charges conjure up, including whether this was a [...]

  42. [...] Pictures: Questions Surrounding the SEC’s Litigation vs Goldman und The End of ‘Government [...]

  43. [...] Some open questions about the Abacus deal.  (Felix Salmon, Big Picture) [...]

  44. At this point Goldman Sachs needs the endorsement of the Pope to restore its credibility…..uh, on second thought, cancel that idea….

    Yep, they better call up their buddy…..God.

  45. riffraff says:

    And then there is this:

    INSIDER TRANSACTIONS REPORTED – LAST TWO YEARS

    http://finance.yahoo.com/q/it?s=gs

  46. [...] Ritholtz has some questions too — more geared to the fallout on the current debate on US financial reform, however, as [...]

  47. [...] Disclosures « Questions Surrounding the SEC’s Litigation vs Goldman [...]

  48. VennData says:

    Lloyd Blankfein says “senior Goldman managers didn’t approve the questioned deals”

    http://seattletimes.nwsource.com/html/businesstechnology/2011585445_goldmandodo18.html

    …wither Goldman’s we have superior risk controls, we have knowledgeable management… etc…

  49. HEHEHE says:

    “”Lloyd Blankfein says “senior Goldman managers didn’t approve the questioned deals””

    They promoted Fab from VP to ED. Presumably the pitchbook and/or offering memo went through their compliance department. Doesn’t matter really what he says now. Cow’s out the barn. Every insider sale from the time of the SEC informal investigation, through the Wells Notice through the SEC complaint could be open to clawbacks and the securities class action bar is going to have a field day.

  50. Investradamus says:

    Whether or not GS’s actions are found to have been illegal, I think it is rather safe to say that what they, Magnetar, and others did was wrong (even if legal) and was, at least in part, responsible for creating this gigantic mess. But the questions I have are: How can you prevent something like this from happening again? Is it even possible? If so, how? If not, what can be done to limit it from occurring again, or limit the magnitude of its impact when it does? And if prevention/limitation measures are taken, what negative unintended consequences might arise?

  51. Cheshire Cat Effect says:

    I see much legal analysis here, the problem is we’ve had the building contractors writing
    the building codes, and at all levels everyone is protecting their job, position and income.
    What we need here is some Chinese law enforcement, in less than one hour the perpetrators
    would be gone the point would be made.

  52. [...] Barry Ritholtz asks a baker’s dozen worth of questions related to SEC litigation vs. Goldman [...]