Tag Archives | SEC

The Financial Crisis As Crime Story

SEC.svgPlunder director Danny Schechter writing for the Nation:

The case has not even been heard in court and the company denies all the allegations. Almost every business publication has carried commentaries by insiders who say the government may have a hard time prevailing, and dismissing all the Sturm and Drang.

And yet the public seems to be delighted if not outraged by the SEC’s charges against Goldman Sachs, the opulent investment bank that many Americans see as the poster child of those causing the financial crisis. Even in the world of business where dislike of government crackdowns is dominant, a new poll shows that a majority believe Goldman is getting what it deserves.

Argyle Executive Forum conducted the survey electronically among its senior corporate leadership community.

The precise wording of the survey question was:

As Goldman Sachs Group is currently at the center of a legal maelstrom triggered by the SEC’s fraud charge last week, we want to ask you how you currently feel about the charges.

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While Economy Collapsed, SEC Staffers Surfed For Porn

Wondering why experts and watchdogs didn’t see the banking crisis coming? They were busy doing some of their own analysis. The Daily News writes:

The country’s top financial watchdogs…spent hours gawking at porn Web sites as the economy teetered on the brink, according to a memo released Thursday night.

The shocking findings include Securities and Exchange Commission senior staffers using government computers to browse for booty and an accountant who tried to access the raunchy sites 16,000 times in one month.

Their titillating pastime was discovered during 33 probes of employees looking at explicit images in the past five years, said the memo obtained by The Associated Press. Seventeen of the randy employees were “at a senior level” earning salaries of up to $222,418.

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Government Brings Fraud Charges Against Goldman Sachs

Goldman_SachsFinally! Despite the cozy relationship between the Obama administration’s financial team of Geithner, Summers, et al with their brethren on Wall Street, the SEC reveals that it has the balls to go up against Goldman Sachs. I fear for the job security of senior SEC staffers, but meanwhile they are hurting Goldman where it counts – the firm’s stock price dropped 10% on the announcement, as reported by NPR:

The government has accused Goldman Sachs & Co. of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering.

The Securities and Exchange Commission announced Friday civil fraud charges against the Wall Street powerhouse and one of its vice presidents. The agency alleges Goldman failed to disclose that one of its clients helped create — and then bet against — subprime mortgage securities that Goldman sold to investors.

Investors in the mortgage securities are alleged to have lost more than $1 billion, the SEC noted.

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Madoff Explains How He Concealed Fraud

CBS News correspondent Randall Pinkston reports:

In a wide-ranging jailhouse interview with SEC Inspector General David Kotz, convicted swindler Bernard Madoff explained how he managed to conceal his multi-billion-dollar fraud operation.

“It never entered the SEC’s mind that it was a Ponzi scheme,” Madoff said, because of “the reputation I had.”

“They thought the likelihood of Madoff being a big criminal was probably not something that was realistic,” said Paul Atkins, a former SEC Commissioner.

At the height of his career, Madoff was regarded as a financial genius, he even served as chairman of NASDAQ.

In 2003, Madoff was sure he would be caught and was surprised when investigators did not check his accounts to see if he had actually traded stocks – which he had not.

It is accounting 101, Madoff told the inspector general, to look at DTC – Depositor Trust Commission – to discover a Ponzi scheme.

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