Fraud at Goldman Sachs?

McClatchy is out with an incredibly important series on Goldman Sachs, the first two parts of which have gone up already, that raises questions about whether Goldman committed securities fraud at a massive level. I am guessing the next three parts of this series are going to be really explosive as well. What Goldman essentially did was to have one big group of their traders, call them Group 1, marketing mortgage securities as triple-A investments, while other traders in the company, call them Group 2, were secretly betting that there would be a steep drop in housing prices, which would mean the values of those securities Group 1 was selling would drop off a cliff. Goldman Sachs was making money coming and going, and it is virtually impossible to believe senior management did not know that the securities they were selling were junk. Now I'm not a securities lawyer but that sure sounds like fraud to me.

Gordon's superbly researched series follows on Matt Taibbi's brilliant Rolling Stone article on Goldman Sachs earlier this year, which walks through many of the same issues. With what Gordon and Taibbi have both been able to document, folks at the DOJ sure ought to be looking at whether criminal charges should be filed against Goldman. And the Obama White House should be coming down on the executives at Goldman Sachs with both feet, hard. This kind of financial manipulation, which has cost public pension funds and other investors many billions of dollars, needs to be stopped, and huge conglomerates like Goldman need to be broken apart. This story is not just a story about simple greed or securities fraud, it's a story about a company that has gotten so big and powerful that it can manipulate markets at will. This story goes to the heart of the recent financial collapse, for which Goldman Sachs deserves a sizable share of the blame. They need to be broken into pieces so that they can't wreak this kind of havoc again. And it sounds increasingly like some of their executives might deserve to go to prison for a long time.

Comments

[newbridge]

With Goldman Sachs campaign contribution of almost $1,000,000 and Geitner's cozy relationship with Goldman, the administration will not come down hard on Goldman. Goldman has been mentering Obama for years, clearing the way for him to be elevated to the Presidency. I was hoodwinked into voting for Obama (I won't again). Geitner needs to go.

[lightningbolt]

Justice is only for little people in this country. Goldman Sachs will never be held responsible unless we apply some massive pressure to the government in the form of a national labor strike.

[Sundialsvc4]

It is axiomatic that there is rampant crime. This is the power of Bribery. This is why, when the authors of the Constitution wrote the single sentence that comprises Article 2, Section 4, they put the words "treason" and "bribery" side-by-side.

It's the story of Rumpelstiltskin, all over again. The same appeal, the same empty folly, and the same end.

It cannot escape the attention of the approximately 6 billion OTHER people on this planet that, when they are now dealing with the United States in any financial capacity, they are dealing with a hive of deliberate and intentional fraud, deceit, swindling and misrepresentation. "Fool me twice? Not."

[02bmw76]

Fraud at Goldman, fraud at Wall Street, fraud at the Federal Reserve, fraud at AIG, fraud at the White House, fraud at the lobbyists on K Strret, fraud at offshore banks, fraud in taxes, fraud in elections, fraud in Iraq, fraud in Afghanistan, fraud in campaign promises, fraud in financial reform, fraud in healthcare reform, fraud at the SEC, fraud at the Supreme Court, fraud at Countrywide, fraud at the Congress and the Senate... Hmmmm, I sense a pattern here, don't you? Bravo Zulu to the brave that have the chutzpa(h) to call it like it is.

[dart79]

The speed the market dropped and rebounded is suspect.

[blizb]

Media needs to cover the real stories like this, and the protests shouldn't be with the government but with the financial community.

I don't understand why they haven't staged a protest on Wall Street.

Reagan, Bush/Cheney, both indulged in policies that allowed the monstrous growth of certain financial institutions and allowed deregulation and a lack of oversight.

No amount of government protest will make up for a massive protest on Wall Street and the Banks.

They need to be made aware of the public and why they need to address the investment in America, jobs and our nations economy in order to support their own existence.

If the public is out of sight then they are out of mind and that reality needs to change. March on Wall Street and march on the Banks because that is the only way they will ever see "we the people".

[lgillooly]

This should be on every Front Page in America and the lead story on every news program IF we had a 4th Estate that does its job. Sadly, a handful of megacorporations own 95 percent of media so the lead story will likely be about the swine flu or the NY 23 race.

[givesflack]

And of that 95% how many of them are close associates of Goldman? The thing is, this fraud has been perpetuated by not just one industry but them all. It's Anti-trust on a countrywide (them too) and global scale and the most powerful have been exerting it's will over a gullible and apathetic people the world over. Their ability to do this is because there is not another political option to contrast Capitalism. I think the world was fairer and more balanced when communism presented at least a counter weight to the Free Market. Now even capitalist countries with socialist safety nets are under the same suspicion as Russia once was, a direct threat to fairness and parity back here at home, land of the indebted slaves of America.