Here is a recap of one Financial Manager from Goldman Sachs who broke his trust with his investors, and made Billions in the process. Who walks the streets navigates the streets in limos unscathed -- because to pursue such bilking of investors is no longer, worth the time and effort of the current DOJ, led by Eric Holder.
Why cause a ruckus? Can't we just let sleeping dogs lie? Otherwise it might come back and bite the Economy in the ass, don't you know. Who wants that?
Well here's why it's worth "the trouble" -- from someone who went to great lengths to actually put Criminal CEO Managers IN JAIL, not so very long ago. Different time, but still the same country, still the same Economy back then. In theory.
William K. Black on Fraud
Bill Moyers Journal --April 23, 2010
[...]
Black tells Bill Moyers on THE JOURNAL that, despite evidence of fraud at the top banks, prosecutions seem far away. "If you go back to the savings and loan debacle, we got more than a thousand felony convictions of the elite. These are not, you know, tellers or something. We today have zero convictions, zero indictments, zero arrests of any of the elite, non-prime lenders that, through their fraud, drove this crisis."
The Case Against Goldman Sachs
On Friday April 16, the U.S. Securities and Exchange Commission seemed to agree, charging Goldman Sachs with fraud in its representation of collatoralized debt obligations (CDOs) to its investors. At the heart of the case is whether Goldman Sachs was completely honest with potential investors about how the portfolio of CDOs was chosen. The SEC alleges that Goldman Sachs didn't acknowledge that the portfolio was assembled with the help of hedge fund manager John Paulson, who was planning on betting against the portfolio. Black explained why it could be a criminal matter:
It has nothing to do with the buyer being dumb. Any buyer would have wanted to know that this portfolio was set up to fail. That would have been material information within the language of the securities laws. And they were not only not told that, they were told the opposite, that it was picked so that it would succeed. That, if it's true, is a misrepresentation, or in English, a lie. And that would establish securities fraud. And that, by the way, is a felony, not just a civil wrong.
It is a Fraud. It is a Felony. It is Wrong.
It was wrong in the 80's and 90's -- it should still be wrong NOW.
Wrong enough to at least want to set an example, for other wantabee billionaires, like John Paulson ... who are just now getting their Harvard MBA's, with a minor in Banking ...
Bill Moyers talks with William K Black -- Video
April 23, 2010
[... from Video Transcript:]
BILL MOYERS: Let's talk a moment about the government's allegations against Goldman Sachs. I mean, I get dizzy just reading about it. But the Wall Street Journal reporters did a terrific job this week of trying to sort it out. And they say, "It centers on a deal Goldman Sachs crafted, so that the hedge fund king, John Paulson, could bet on a collapse in housing prices." Is that your reading of it?
WILLIAM K. BLACK Yes, I mean, the complaint actually focuses on lying to investors. So it's a very traditional securities fraud complaint.
[...]
BILL MOYERS: Wasn't he betting that people wouldn't be able to pay their mortgages?
WILLIAM K. BLACK Not even necessarily that, because most of these are liar's loans, again. And they will not pay, right? It's not an issue of liar's loans, will it work or will it not work. It's only when will it blow up. A liar's loan will blow up. If housing prices keep going up for three years hugely, then they will blow up in the fourth year.
But they will blow up. So he was betting against something that he knew was going to blow up. He didn't necessarily know the timing, but he proved to be right about the timing, because we know from the SEC complaint that he was in a rush to get this. He knew that the housing collapse was imminent. And he had to get this deal done right away. And Goldman Sachs felt the same thing. So they went and they got themselves a dupe, ACA. And they told the -- ACA is a group that puts together and supposedly checks the quality of mortgages. Not very well, as it turned out, of course. An investor would obviously want to know that this portfolio was picked to fail. Instead, they were told, according to the SEC complaint, "No, no, no, no. There's no John Paulson out there. There's only ACA, and it's in your corner. And it's picking a portfolio most likely to succeed." Now if John Paulson knew that Goldman was making those representations, then John Paulson knew those representations were false. And that could make him an aider and abettor.
BILL MOYERS: So tell me where the fraud might be in there, if the government proves its case.
WILLIAM K. BLACK: Well, the fraud is, I'm representing to you, the potential investor, that a competent professional independent firm, ACA, looking after your interests, has picked this portfolio because they believe it's most likely to succeed. When in fact, the portfolio was selected overwhelmingly by Paulson and was selected because it was deliberately chosen to fail.
The Forbes 400 --
The Richest People in America
Rank Name Net Worth Age Residence Source
1 Bill Gates
$59 B 55 Medina, Washington Microsoft
2 Warren Buffett
$39 B 81 Omaha, Nebraska Berkshire Hathaway
[...]
17 John Paulson
$15.5 B 55 New York, New York hedge funds
Forbes bothered to "notice" Paulson. Nothing breeds "success" ... like
getting away with it.
Trader Of The Year: John Paulson Made Billions Shorting Subprime Mortgages
topgunfp.com -- April 8, 2008
[...]
Funds run by Paulson, a hedge fund manager, were up $15 billion in 2007 and he is estimated to have made between $3-$4 billion himself.
How’d he do it? Paulson saw the housing debacle on the horizon long before others did and set up funds to essentially short subprime mortgage backed securities.
[...]
Paulson made a windfall the likes of which have never before been seen in the history of investing.
On Wall Street these days, John Paulson is pretty much God. In fact, he is so revered that Treasury Secretary Henry Paulson is now apparently known as “the other Paulson”.
John A Paulson --
Hedge fund manager who reaped billions betting against subprime
Edited by WileECoyote 26 days ago -- littlesis.org
Shrewd investor pocketed $3.5 billion shorting subprime credit last year; windfall believed to be largest one-year payday in Wall Street history. Net worth was less than $300 million in early 2007. New York native studied finance at NYU. M.B.A. from Harvard, then stints at Odyssey Partners, Bear Stearns. Founded Paulson & Co. in 1994. In 2005 became convinced U.S. economy would soon fail; asked employees to find "bubble" to short. Took advantage of perceived weakness in real estate market by executing complex debt trades, betting against ABX (mortgage) index.
[...]
Donation/Grant Recipients -- 1-10 of 42
Restore Our Future, Inc.
1 contribution ⋅ $1000000 ('11)
Restore Our Future PAC Super PAC tied to Mitt Romney
contribution ⋅ $1000000
Democratic Senatorial Campaign Committee
2 contributions ⋅ $55400 ('07→'09)
John McCain US Senator and Representative from Arizona
3 contributions ⋅ $47450 ('08)
National Republican Senatorial Committee
1 contribution ⋅ $30800 ('11)
Republican National Committee
1 contribution ⋅ $28500 ('08)
Andrew Cuomo Governor of New York State
contribution ⋅ $26000 (Oct 1 '08→Apr 21 '09)
Roy Blunt US Senator and Representative from Missouri
2 contributions ⋅ $16800 ('10)
John Boehner US Representative from Ohio
3 contributions ⋅ $10000 ('11)
Managed Funds Association Political Action Committee
2 contributions ⋅ $6000 ('07→'11)
[32 more ...]
So are there any life lessons to be drawn from this one real-life example. Once again William K Black has a few choice thoughts on the matter:
Banking System Rotten to the Core
by William K Black, PhD, financialsense.com -- 11/25/2011
The following is a transcript of a recent speech given by Professor William Black on an Economics Panel regarding the fraudulent roots of our current crisis and the urgent need for criminal prosecutions among major US banks.
In the Savings and Loans crisis, which was 1/70th the size of this crisis, our agency made over 10,000 criminal referrals that resulted in the conviction on felony grounds of over 1,000 elites in what were designated as major cases.
[...]
In the Savings and Loans crisis, the inevitable National Commission said that fraud was invariably present at the typical large failure. In the Enron era, always frauds from the very top of the organization, and in this crisis the frauds came from the very top of the organization again. But what’s different in this crisis? In this crisis, the same agency that I worked with that made over 10,000 criminal referrals in a tinier crisis made zero criminal referrals. They got rid of the entire function. And so there are zero convictions of anybody in the elite ranks of Wall Street. And if they can defraud us with impunity they will cause crisis after crisis and they will produce maximum inequality.
The group that has the audacity to refer to itself as the productive class is the largest destroyer of lives, jobs, and of wealth of any group ever produced in this world. They wiped out six million existing jobs and five to six million jobs that would’ve been created. As you’ve heard, they’ve left 26 million Americans wanting full-time work with no ability to find that work. If you look at just losses in the household sector, it is $11 trillion. A trillion is a thousand billion. And then they have the nerve to say they are the productive class; and, not this journalist, but what we get as faux journalism today, repeats this endlessly as if it were a fact -- that they create jobs. They destroy jobs. They are mass destroyers of jobs.
[...]
That is only one strike-it-rich story among thousands, about Bankers who got their "Get out Jail Free" cards -- because alas folks like Paulson are
Too Big To Fail; Too Crafty to Notice,
Too Rich to ever, ever Get Caught -- by a DOJ that would rather not "make waves" by actually holding billionaire crooks accountable for their defrauding actions.
Not in today's America ...
Because afterall the economy might collapse or something, if they actually tried to ensure a "fair game" at the Wall Street casino ... we've seen that happen once or twice before.
Now if we only knew WHY ... the most robust Economy in the world, is SOOO god-damned fragile? ... It's an unfathomable mystery.
Ratigan reviews Frontline's Warning, labels Wall Street as Legalized Gambling
by jamess -- Oct 23, 2009
If only those "lying sleeping dogs" ... would actually stay fast asleep, eh Holder? But something tells me they'll be smelling all the green to made before too long ... Before the Economy can begin to re-equalize their derived wealth back to its proper equitable level.
Before someone actually catches up with what they've done. Before those "hounds of greed" work is finally finished. ... There's still wealth out there right? Just waiting to be "leveraged" ... one more time.
If only this were just a "board game," eh Eric Holder, agenda-setter for the Department of Justice?