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Goldman Sachs Charged With Fraud
| Good [+1]Toggle ReplyLink» basdini replied on Fri Apr 16, 2010 @ 2:21pm |
 Coolness: 146125 | NEW YORK [ ] -- Stocks tumbled Friday, led by financials, after the Securities and Exchange Commission charged Goldman Sachs with fraud related to how it marketed subprime mortgages.
The news overshadowed strong quarterly results from Google, General Electric and Bank of America. The Dow Jones industrial average (INDU) lost 124 points, or 1.1%, falling from 18-month highs hit earlier in the week. The S&P 500 index (SPX) lost 20 points or 1.6%, also falling from 18-month highs. The Nasdaq composite (COMP) lost 30 points, or 1.2%, faling from 22-month highs. News that the SEC has charged Goldman with fraud sent the firm's shares down 12% and also dragged on the broader financial sector, with the KBW Bank (BKX) sector index losing 4%. Stocks closed modestly higher Thursday as investors shrugged off the latest jobless claims report and Google reported much better-than-expected earnings after the closing bell. Quarterly results: Three top-tier companies reported results over the last 24 hours. General Electric (GE, Fortune 500) stock fell more than 3% after it reported first-quarter earnings that beat Wall Street forecasts, but sales fell short of expectations. GE said net income fell 18% to $2.3 billion, or 21 cents per share, in the first three months of 2010. Analysts at Thomson Financial had expected earnings per share of 16 cents. The company said revenue fell 5% to $36.6 billion. Analysts had forecast sales of $3.7 billion. GE said it expects earnings to grow for the rest of 2010, though it may take more cost-cutting measures to improve profit growth even more. Bank of America (BAC, Fortune 500) stock fell more than 5% after it reported profit of 28 cents a share. Analysts had expected BofA to post earnings of 9 cents per share. Late Thursday, Google (GOOG, Fortune 500) said net income rose 38% from last year's first quarter. Operating income was $6.76 a share, topping analysts' estimates of $6.60. Google's stock fell more than 6%. Economy: The University of Michigan's consumer sentiment index slipped to 69.5 in mid-April from 73.6 earlier in the month. The reading was a surprise to economists, who forecast it would rise to 75. On a more positive note, the housing market showed new signs of stabilization in a Commerce Department report released before the opening bell. Housing starts rose to a 626,000 annual unit rate in March from a 616,000 annual unit rate in February. That was the highest rate of housing starts since November 2008 and topped forecasts for an increase to 610,000. Starts also rose over 20% from a year ago. Building permits, a measure of builder confidence, rose to a seasonally-adjusted annual rate of 685,000, the highest tally since October 2008. Results topped forecasts and also showed permits rose 34% versus March 2009. World markets: In overseas trading, European markets fell, with London's FTSE down 1.2%, France's CAC 40 down 1.5% and Germany's DAX down 1.3%. Asian markets slipped too, with the Hong Kong Hang Seng down 1.3% and the Japanese Nikkei down 1.5%. Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.80% from 3.85% late Thursday. The 10-year had risen as high as 4% a week ago, an 18-month high. Treasury prices and yields move in opposite directions. The dollar and commodities: The dollar gained versus the euro and fell against the yen. COMEX gold for June delivery fell 23.60 to $1,136.10 per ounce. U.S. light crude oil for May delivery fell $2.84 to $82.67 a barrel on the New York Mercantile Exchange. Market breadth was negative. On the New York Stock Exchange, losers beat winners four to one on volume of 660 million shares. On the Nasdaq, decliners beat advancers three to one on volume of 1.09 billion shares. [ money.cnn.com ] |
| I'm feeling surly right now.. | |
| Good [+1]Toggle ReplyLink» databoy replied on Fri Apr 16, 2010 @ 4:18pm |
 Coolness: 107040 | This is big, REAL BIG. |
| I'm feeling regenerate right now.. | |
| Good [+1]Toggle ReplyLink» basdini replied on Sat Apr 17, 2010 @ 1:19am |
| Coolness: 146125 | it is interesting, the more i find out about goldman sachs the more astounded i am...
i think they were involved with this as well [ en.wikipedia.org ] |
| I'm feeling surly right now.. | |
| Good [+1]Toggle ReplyLink» Gamos replied on Sat Apr 17, 2010 @ 10:24am |
 Coolness: 94420 | Goldman only lost 12% of their market cap, and the payout is expected to be 1-3 billion, or 1-3% of the company value. So theres going to be a material hit to their reputation, but its not that big or anything. I think it gives americans closure. They finally got goldman, the poster child.
Now, if the SEC brings 10+ cases of 1-3$ B each against goldman, then its big, because goldman will have to be disolved and ill cease to exist. Or if similar cases are brought on the other survivors of the crisis, finance is going to become a politically toxic place to be. But as of now...not that big. |
| I'm feeling a message in a bottl right now.. | |
| Good [+1]Toggle ReplyLink» databoy replied on Sat Apr 17, 2010 @ 11:08am |
| Coolness: 107040 | Well we'll know on monday when the stock exchanges resume. |
| I'm feeling regenerate right now.. | |
| Good [+1]Toggle ReplyLink» Gamos replied on Sat Apr 17, 2010 @ 11:40am |
| Coolness: 94420 | Originally Posted By DATABOY
Well we'll know on monday when the stock exchanges resume. or yesterday cuz the news was released during trading hours... [ finance.yahoo.com ] :P Update » Gamos wrote on Sat Apr 17, 2010 @ 11:41am if you look at the chart on the right, you can actually see the time when the news was announced. Its like a magical picture |
| I'm feeling a message in a bottl right now.. | |
| Good [+1]Toggle ReplyLink» databoy replied on Sat Apr 17, 2010 @ 12:42pm |
| Coolness: 107040 | Well according to one of the producers that I work with who specialises in the economie, the after shock of international law suites could be quite bad. Thats the kind of stuff that will be brewing during the weekend. |
| I'm feeling regenerate right now.. | |
| Good [+1]Toggle ReplyLink» Gamos replied on Sat Apr 17, 2010 @ 4:35pm |
| Coolness: 94420 | uh huh. An economic expert who you work with (producing media no less) has the forsight to predict that in the world of finance, an SEC lawsuit against GS will trigger lawsuits against GS by foriegn investors?
I hope ur not taking any type of financial advice from this expert. |
| I'm feeling a message in a bottl right now.. | |
| Good [+1]Toggle ReplyLink» databoy replied on Sat Apr 17, 2010 @ 9:28pm |
| Coolness: 107040 | I didn't say my source was an economic expert. He is a radio show producer. If he was an economic expert, he wouldn't be working at cbc for a measly 60k a year.
Admittedly, I'm not an economic expert myself, most of the knowledge i have is second hand. But I think what he was driving at was: "Goldman case likely to unleash torrent of lawsuits By Daniel Wagner, AP April 17th, 2010 WASHINGTON — Government lawyers are facing many potential pitfalls as they attempt to prove the civil fraud charges against Goldman Sachs & Co. Experts say the Securities and Exchange Commission will need to lay out a complex set of facts based on what appears to be hazy evidence. SEC lawyers must prove that Goldman misled investors in some mortgage investments that failed. The charges filed Friday are expected to unleash a torrent of other litigation, including suits from Goldman clients and shareholders and investigations by foreign governments. Goldman says the charges are “unfounded in law and fact.”" [ economictimes.indiatimes.com ] [ blog.taragana.com ] I guess we'll see p.s. I'm quite wary of taking any type of financial advice from any so-called economic experts. |
| I'm feeling regenerate right now.. | |
| Good [+1]Toggle ReplyLink» Gamos replied on Sat Apr 17, 2010 @ 9:58pm |
| Coolness: 94420 | Wow...thats crazy, but it seems very hopeful for these investors to launch lawsuits. I wonder how many more of these they will find. The issue of legality is very subtle, and hard to find evidence of. From the documents I've read, the SEC has very specific evidence that is specific to one or 2 securities. Its not blanket evidence against all the subprime products goldman sold.
The product wasn't the issue...sythentic CDOs are acceptabe investments to sell to institutional investors. It wasn't that Goldman built a product to fail that was the issue. Thats also acceptable because its buyer beware. It wasn't even that Goldman shorted the product they sold to their clients that was the issue. Goldman has been doing it for years. For every buyer there has to be a seller. Its like if you sell your house cuz you think its overpriced, but someone pays it. Its legal to do that. It was that Goldman simply failed to disclose that the portfolio was made up of hand picked securites that a hedge fund manager thought would fail. If they had put that in the prospectus, they would have their legal basis covered. In other words, its the fail to disclose rather than the product that is the issue. Which means that for every single law suit brought against Goldman Sachs, investors have to prove that Goldman didn't disclose material information. I wouldnt be surpised if Goldman did that in multiple products rather than just a couple, but finding proof is going to be difficult without whistleblowers. At $3B each, they would have to find 7+ to ruin the company. |
| I'm feeling a message in a bottl right now.. | |
| Good [+1]Toggle ReplyLink» databoy replied on Sat Apr 17, 2010 @ 10:32pm |
| Coolness: 107040 | How cool would it be if La Caisse de Dépot had a case against them? |
| I'm feeling regenerate right now.. | |
| Good [+1]Toggle ReplyLink» basdini replied on Sat Apr 17, 2010 @ 11:53pm |
| Coolness: 146125 | all i see is crime...
CASINO AMERICA!!!! |
| I'm feeling surly right now.. | |
| Good [+1]Toggle ReplyLink» databoy replied on Mon Apr 19, 2010 @ 2:18pm |
| Coolness: 107040 | "Germany confirmed Monday it is looking into the possibility of seeking compensation from Goldman, and the U.K. said on the weekend it will begin its own probe into Goldman's derivative structure.
// Prime Minister Gordon Brown of Britain called on regulators there to investigate the bank as well to determine if it misled investors in Great Britain. On top of this, Europe is already investigating Goldman's role in Greece's debt woes." Read more: [ www.cbc.ca ] |
| I'm feeling regenerate right now.. | |
Goldman Sachs Charged With Fraud
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