SEC Charges Goldman Sachs with Billion-Dollar Fraud…At Last

Sunday, April 18, 2010

A lot of Americans on both the left and the right have been wondering if the bankers and Wall Street investors who caused the economic collapse that began in 2008 would ever have to pay the price for what they did to the country. Goldman Sachs employees and their families were the leading corporate donors to Barack Obama’s presidential campaign, and Obama has not been shy about including former Goldman Sachs employees in his administration. Records also show that Secretary of the Treasury Timothy Geithner spent more time last year talking with Goldman Sachs CEO Lloyd Blankfein than he did with the chairman of the Senate Banking Committee, Christopher Dodd. So it came as a pleasant surprise on Friday when news broke that the Obama administration is finally seriously cracking down on the financial community for the first time.

 
The Securities and Exchange Commission is going after Goldman Sachs in civil court for selling mortgage investments that the firm wanted to fail, helping to set off the crash of the housing market. But the man who gave Goldman the idea for the alleged fraud scheme, billionaire hedge-fund manager John A. Paulson, has avoided being named a party to the lawsuit.
 
Goldman reportedly created the investment fund (Abacus 2007-AC1) in 2007 after Paulson pitched the idea to the firm. Paulson, who unsuccessfully shopped his plan to other Wall Street players by insisting it was possible to profit off the impending housing collapse, was allowed to choose the mortgage bonds for the fund, even though Goldman told its investors that an independent manager would do so.
 
Paulson went on to make “$3.7 billion in 2007 by correctly wagering that the housing bubble would burst,” according to The New York Times. Investors in Abacus 2007-AC1 lost more than $1 billion, while in this deal alone, Paulson made about…$1 billion.
-David Wallechinsky, Noel Brinkerhoff
 
S.E.C. Accuses Goldman of Fraud in Housing Deal (by Louise Story and Gretchen Morgenson, New York Times)
SEC v. Goldman Sachs (Securities and Exchange Commission) (pdf)
Investor Who Made Billions Is Not Target of Suit (by Gretchen Morgenson and Louise Story, New York Times)

Comments

xisanadu 14 years ago
I'm Dropping in from Japan. I really Hope Everything Revealed and Disclosed, not only What are Related to SubPrime Junk Commodities but what's The Affair MANUPILATED and FABRICATED to have tied up with Our Japanese Ex-Ancienne Regime-LDP(LiberalDemocratic Party) Administration!!!!!!!!!!!!!!! Guys, Do You Know, in 2005 when The Same Year Goldman Sachs Asked( or Demanded) AIG to Endorse Their Fabricated Synthetic SubPrime Commodities Such As "Abacus" or CDOs, in Japan National Election of Diet (corresponds to Congress in U.S.) was Conducted? Atmost The Faucal Point of that Election was for or against "The Privatization of Japan Post". Why? Because The Prime Minister then of LDP, Junnichiro Koizumi, Famous for Mr. Bush's Bad Buddy and Notorious NOW for Betraying Japanese National Interest and for Jeopadizing and Undermining Japanese Quality of Life, Persistantly Insisted of Japan Post's Privatization, Despite of Enormous Opposition, in Reality at Upper House The Bill of Privatization of Post was Turned Down owing that Many of Colleagues inside LDP were Opposed to IT. Of Course They were Against IT! There Has Not Been Appropreate Reason to Force Japan Post to Privatize, Because They Were Genarating Enough Profit then. We Japanese Nation Couldn't Understand Why HE (Junnichiro Koizumi) Stack to Privatization of Post in SO Obssessed Manner at That Time. Just After The Bill Was Turned Down at Upper House, Koizumi Claimed Lower House( that is Predominant against Upper House when Two Houses are Opposed to Each Other) on the Course of Election, Despite that Majority of Lower House was Occupied by HIS Colleagues LDP!!!!!!!!!! It Was A Insane Conduct Really! He Knew Many of Fellow Colleagues inside Lower House of LDP were Opposed to Bill of Privatization. SO In Order To Get Rid Of Them, He Manifested that Those Fellow Colleagues that were Opposed to The Privatization Bill Should Leave LDP Party, Even If They Rejected His Demanding HE and His Party Wouldn't Give Them Formal Entitlement of Candidate as LDP Member!!!!!!!!!!! Then Why Koizumi Stack to That Privatization Bill Pass in SO Obssessed Way? That's The Main Story that The "Wall Street" Got Involved In!!!!!!!!!! The Villans of "Wall Street" then Requested Koizumi to Privatize Japan Post in Order for The Post after Privatized to Freely Use ITS Collossal Amount of Capital Fund of Japan Post Bank( within Japan Post then) and Japan Post Insurance (Equivalent to More Than 3.5 TRILLION $!!!!!!!!!) Without Permission of Japanese Congress and to Accept to Buy U.S. Government Bond to ITS Limit. Japan Was Already NO.1 Country (Now Second to China) to Have Bought and Support U.S. Government Bond then and was TOLD by U.S.Government Harshly NEVER to Sell for GOOD!!!!!!!!! And Yet, They and U.S.Government Urged Japan Spend More Money for U.S.Government Bond and Support ITS Collossal Amount of Deficit Out Of Japan Post's Pocket! As Soon As Election Campaign Started (Precisely Speaking, Months before IT), "More Than 5 Billion$" of AIG Money Was Thrown Into All the Japanese Pricipal Medias( TVs and News Papers ) for Brain Washing Japanese People Who were at A Loss Why Our Prime Minister then was SO Eager to Privatize Our Post Nonetheless It Was Going Well without Such Radical Change. 5 Billion$ is NOTHING Compared to 3.5 TRILLION$ that Could Be Obtained Afterward, They Thought I Think. They Even Promissed If Privatization Materilized, They Would Present Prime Minister Koizumi and His Protege Heizo Takenaka, Finance Minister of Japan then, total 30 Billion$ as A Personal Check of Bank in Dubai. I Don't Remember the Name, but YOU Americans Know Well, of Notorious Advertizing Agency for ITS Republican's Negative PR Campaign Against Democrat. The Top of that Agency Came to Japan and Met Prime Minister Koizumi and HIS Protege and Go-Between in touch with American Side, Heizo Takenaka Finance Minister of Japan then, Talked HOW The Campaign of Privatization and LDP's Victory at Election Leads to Success Involving All The Principal Japanese Medias turning into Driving Forces for Privatization giving Japanese People The Impressions Privatization of Japan Post is Corner Stone & MOST Significant Change for Japan's Success in Future (that Has Turned Out To Be Absolute Lie and Demagogue NOW SO Present New Administration Had to Modify Law )!!!!!!!!!! Fortunately, Our Japanese Financial System Hasn't Been Damaged by Sub Prime Junk Commodities Compared with U.S. itself and Principal EU Countries. But We Japan Has A Biggest Problem!!!!!!!!!! Solving Defration? Far From IT! Accumulated Fiscal Deficit like Your Country? NO! As You May Know, We Japanese Nation Has Chosen New Government at last August Election Consists of "Democratic Party" Opposition to TOO Long Reign of LDP in Japan for more than 50 Years! We Japanese People Expected JAPAN WILL Re-Start, Social Structure and Quality Life of Our Nation Has Been SO Damaged by The LDP and Komeito Administration through This Decade Especially. So Many Aspects of Social System Ought to Be Altered from the ONES that were under Ancienne Regime of LDP and Komeito. Neverthless, Japanese Principal Medias( TVs, News Papers and Even Web Portal Sites ) that Have LONG Been Built in LDP Party's PR Tools and "EXPLOITED" Enormous Vested Interests Themselves out of IT, Never Never Admit "The Time Has Changed"!!!!!!!!!!!!!!!!! All the Japanese Medias Along With "Dentsu( Villan of Villans )" Biggest and Most Influencial Adverting and PR Agency in Japan to The Extent that All the Japanese Principal Medias( Whatsoever TV, News Paper or Web ) Are Controlled by IT, Japanese Prosecusion Office All Being Linked With Ex-LDP-Administration Try HARD to Shatter We-Elected Present Democratic "Hatoyama" Administration, Manupilating Figure of Supporting Rate, in Reality There Still More Than 50% of People Supporting, They Announced More Than 50% People Non-Support and Around 30% Supporting Rate for Present Administration!!!!!!!!!! Why They Are Rushing to Do SO? Because The Election of Upper House due to This Summer. From The Beginning of the Year The Japan Prosecusion Agency Deeply in Conjunction with LDP and CIA Tried HARD to Fabricated The Cases and Gun-shoot The Top Two Leaders of Democratic Party that are Never Never TRUE un successfully , but THEY WOn't, NEVER Stop to END till to Shatter Present Administration and Want LDP back in Office!!!!!!!!!!!!!! Because Their Interests Have LONG been Alongside With LDP! I Suppose YOU American over Middle Age Remember TV Drama Series "Prisoner NO.6". We Japanese People NOW Are Absolutely in the Same Condition like TV Drama Protagonist. If All The Medias around YOU Insist Present Government is No Good and Has Already Lost Nation's Trust, Whoever Can Contradict IT????????????? Present Japanese "Hatoyama" Administration is NEVER NEVER Same Condition As The Last Period of Mr. Bush!!!!!!!!!!!!! I Tell YOU Guys, Only Japan Democratic Party Can Make Our Country Japan "NORMAL" Ordinary Country! Do YOU Remember "Japan Air Line" Went Bankruptcy? Had LDP Party Continued Reign Over JAPAN, They Never Would Have Revealed The Fact and Still Try to Prolong Final Decision. That's Their WAY and Eventually Deepens The Scar of Case. When IT Also Comes to TOYOTA Issue, Present Democratic Administration Coolly Criticized TOYOTA's NOT Swift Response on This Matter, Not Try to Cover Up Spreading Eruption by Backyard Negotiation Between Two Political Entities that former LDP Administration and American Counterpart Republican Used to Exercise. We Japanese NOW Need the Exposure of TRUTH that at National Election in 2005 in Whivh All the Japanese Medias Were Got Involved and Plotted, Fabricated SCENARIO on the Course for Privatization of Japan Post. Japanese Medias Try NOW the Deja-Vu of 2005, Manupilating Surveying Figure, for Victory of Long Fellow Buddy LDP. If You Want JAPAN Become "NOMAL" Ordinary Country, Let AIG and Goldman Sachs Exercise Testimony at Congress ABOUT The Issue How They Got Involved in Japan Post Privatization Matter WITHOUT Concealing Anything. We Japanese are Not Trying to Person in Charge of AIG and Goldman Sachs then Throw into Jail, But We Need to Reveal Deception of All the Japanese Media and Dentsu. Help US, So Realize( Materilize ) Testimony of AIG and Goldman Sachs at Congress on JAPAN 2005 Japan Post Issue, Please!!!!!!!!!!!!!!!!!!!!!

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