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(CNBC)   The smartest trader at Goldman Sachs just found himself the best legal loophole in the world. He'll pass GO and collect his $200 million   (cnbc.com) divider line 40
    More: Hero, Goldman Sachs, U.S. Securities and Exchange Commission, National Australia Bank, loopholes, half-month, foreign investors, CDOs, securities fraud  
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9925 clicks; posted to Business » on 02 Nov 2010 at 1:57 AM (3 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



40 Comments   (+0 »)
   

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2010-11-02 02:10:21 AM
"The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."



What?
 
2010-11-02 02:36:59 AM
media.cnbc.com

Wow. All this time I thought Fabrice was a black dude. From the redick boasting I guess. Well, and the name.
 
2010-11-02 02:39:50 AM
Mainrodax: "The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."



What?


Read "The Big Short". Excellent book, fast read, and I have essentially no financial education. As in, Accounting 101 confuses me. But that book was a page turner, and I learned a *lot*.
 
2010-11-02 02:56:51 AM
What?

Basically, Goldman withheld information from investors that would have revealed how potentially risky the investments really were.

As far as I know, Goldman's defence has been that companies betting against their own products is OK because everyone does it, when it's quite possible that's part of the problem anyway.
 
2010-11-02 03:01:42 AM
Mainrodax: "The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."

What?


He sold CDOs that were intentionally chosen to be as bad as possible (while hiding this from the buyers), and then simultaneously bet against them.
 
2010-11-02 03:04:49 AM
Mainrodax: What?

Imagine they sell you a house that's right by a levee, and hide from you how faulty the levee is, then take out a giant flood insurance policy on the house.

Make money coming and going.
 
2010-11-02 03:14:15 AM
Mainrodax: "The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."



What?


Well if you don't understand I'm not going to explain it to you!
 
2010-11-02 05:09:15 AM
Assuming he does wriggle away from the SEC because the mark was an overseas investor, I would think the Germans are still due a crack at him.
 
2010-11-02 06:40:23 AM
img443.imageshack.us

What a sociopath may look like.
 
2010-11-02 06:58:40 AM
PlatinumDragon: What?

Basically, Goldman withheld information from investors that would have revealed how potentially risky the investments really were.

As far as I know, Goldman's defence has been that companies betting against their own products is OK because everyone does it, when it's quite possible that's part of the problem anyway.


Technically, they "hedged" or reduced their risk by selling them securities and then taking out an insurance if the securities decline in value. At the moment, this is legal. Since the investors did not think to actually ask, in writing, the specific details of the deal, they are out of luck. The Goldman's trader is so full of win right now. It is likely his new corner office is being fitted for a solid platinum desk chair.
Nick Nostril: What a sociopath may look like.

What a winner may look like. He is the new American hero.
 
2010-11-02 07:10:03 AM
The house always wins!
 
2010-11-02 08:01:33 AM
Northern: What a winner may look like. He is the new American hero.

We should put him up on a lamppost so that everyone can admire him.
 
2010-11-02 08:07:32 AM
No way his motion is getting granted, by the way. He knows he's going down. The Supreme Court case they're talking about basically says that there's no claim to be made when the injured party and the sued company are foreign entities because there is no extraterritorial reach in the securities statutes. It's about where the offending action is taking place. The lower courts have extrapolated the reasoning to dismiss cases where the investors are US nationals but the companies are foreign and thus acting foreign...ly. This dick, however, was working for a US company and acting in the US. You don't get a pass because your victim is foreign.

Long story short, defense attorneys write tons of these motions to dismiss. Homeslice here isn't getting off that easy.
 
2010-11-02 08:26:13 AM
Financial weasel makes a shiat ton of money screwing over someone else. No news here.
 
2010-11-02 10:03:06 AM
So, now we find getting away with financial fraud heroic?

If a mugger got off on a legal loop hole, would that low-level financial fraudster be a hero too.

I got mugged by a very polite individual who leveraged his ability to shoot my unarmed butt against all the money in my wallet. He let me keep my cards. What a guy!

HERO!
 
2010-11-02 10:05:03 AM
Eapoe6: So, now we find getting away with financial fraud heroic?

Not me. If I had any say, this guy would already be strung up by his neck. But I guess a man can dream...
 
2010-11-02 10:21:23 AM
Mainrodax: "The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."



What?


Here is the low tech version of the this fraud:
Goldman Sachs sold video games systems to their customers.
The video game systems were nothing but the box filled with a brick.
Goldman knew they were selling bricks in video game boxes.
They did this willfully because they know they own (through massive financial influence or "money talks bullsh*t walks) the US courts (and US treasury.)
 
2010-11-02 10:32:39 AM
Eapoe6: Mainrodax: "The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."



What?

Here is the low tech version of the this fraud:
Goldman Sachs sold video games systems to their customers.
The video game systems were nothing but the box filled with a brick.
Goldman knew they were selling bricks in video game boxes.
They did this willfully because they know they own (through massive financial influence or "money talks bullsh*t walks) the US courts (and US treasury.)


Worse, they packaged games that they knew would short out all the rest of your games. And burn down your house. And they were buying fire insurance of your house.
 
2010-11-02 10:49:26 AM
yakmans_dad: Eapoe6: Mainrodax: "The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."



What?

Here is the low tech version of the this fraud:
Goldman Sachs sold video games systems to their customers.
The video game systems were nothing but the box filled with a brick.
Goldman knew they were selling bricks in video game boxes.
They did this willfully because they know they own (through massive financial influence or "money talks bullsh*t walks) the US courts (and US treasury.)

Worse, they packaged games that they knew would short out all the rest of your games. And burn down your house. And they were buying fire insurance of your house.


Plus they were shorting the insurance companies and owned the clay mines and brick plants.
 
2010-11-02 11:10:16 AM
JustFark:

Worse, they packaged games that they knew would short out all the rest of your games. And burn down your house. And they were buying fire insurance of your house.

Plus they were shorting the insurance companies and owned the clay mines and brick plants.


Worse than that. They flooded the clay mines with battery acid and buried the rescue teams in mud that's been infested with fire ants.
 
2010-11-02 11:58:52 AM
yakmans_dad: JustFark:

Worse, they packaged games that they knew would short out all the rest of your games. And burn down your house. And they were buying fire insurance of your house.

Plus they were shorting the insurance companies and owned the clay mines and brick plants.

Worse than that. They flooded the clay mines with battery acid and buried the rescue teams in mud that's been infested with fire ants.


So, what you're saying is that they're douchbags?
 
2010-11-02 11:59:57 AM
yakmans_dad: JustFark:

Worse, they packaged games that they knew would short out all the rest of your games. And burn down your house. And they were buying fire insurance of your house.

Plus they were shorting the insurance companies and owned the clay mines and brick plants.

Worse than that. They flooded the clay mines with battery acid and buried the rescue teams in mud that's been infested with fire ants.


Drilled a hole in the house foundation, inserted garden house, turned it on.
 
2010-11-02 12:43:33 PM
Hero?
 
2010-11-02 12:59:29 PM
Does anyone know of an article/something that would provide reasons as to why these derivatives are in any way a good thing? I can't see how they generate anything of actual value, and the tendency is to cause damage to the rest of the market as far as I can see.
 
2010-11-02 01:44:16 PM
He isn't being sued by overseas investors. That was what got the precedent cited tossed. He is being sued by the regulator for not just crossing an ethical line but for getting caught doing it. The location of the clients makes no difference in this case.

If he holds a professional license and is subject to oversight by the SEC, those regulations and remedies go far beyond the scope of "law." Generally speaking, regulations are much, much broader than the law and written by the regulators themselves. Much of the time, the law defines potential sanctions and then lets the regulator decide how far to take punishment within the allowed range. I don't hold a securities license so I don't know what is permitted, but if the regulator decided to prosecute the guy, he should be toast. They don't go after people very often (and certainly not often enough, in my opinion) unless they have been very blatant about it.

That being said, you couldn't pay me enough to get a securities license. Too much trouble, too much compliance and control by the companies out of terror of an SEC probe.
 
2010-11-02 01:51:38 PM
Nick Nostril: What a sociopath may look like.

Northern: What a winner may look like. He is the new American hero.

These two thinks are one and the same thanks to Objectivism.
 
2010-11-02 03:15:27 PM
Nick Nostril: What a sociopath may look like.

And he's richer than you. Suck on it.
 
2010-11-02 03:19:26 PM
un4gvn666: Eapoe6: So, now we find getting away with financial fraud heroic?

Not me. If I had any say, this guy would already be strung up by his neck. But I guess a man can dream...


People like you are what is wrong with this country. I'm sick of this ethics-based bullshiat. Really, we're concerned that a bunch of pussies lost their money? They weren't as smart as him, and now everyone has gotten what they deserved, including him.

Business is simply an object lesson in Social Darwinism. The strong survive, and the weak will be destroyed. Too bad the rest of society isn't like that. farkheads like you would have been swallowed up a long time ago.
 
2010-11-02 03:47:06 PM
69ronpaul420: un4gvn666: Eapoe6: So, now we find getting away with financial fraud heroic?

Not me. If I had any say, this guy would already be strung up by his neck. But I guess a man can dream...

People like you are what is wrong with this country. I'm sick of this ethics-based bullshiat. Really, we're concerned that a bunch of pussies lost their money? They weren't as smart as him, and now everyone has gotten what they deserved, including him.

Business is simply an object lesson in Social Darwinism. The strong survive, and the weak will be destroyed. Too bad the rest of society isn't like that. farkheads like you would have been swallowed up a long time ago.

Go away, troll. You're being too obvious.
 
2010-11-02 03:51:31 PM
The court denied Tourre's motion to dismiss and is allowing the SEC to file an amended complaint, yet subby states that Tourre found a legal loophole. I'm not quite following subby's logic here. What is this "best legal loophole in the world?" Any help?
 
2010-11-02 03:56:35 PM
69ronpaul420: un4gvn666: Eapoe6: So, now we find getting away with financial fraud heroic?

Not me. If I had any say, this guy would already be strung up by his neck. But I guess a man can dream...

People like you are what is wrong with this country. I'm sick of this ethics-based bullshiat. Really, we're concerned that a bunch of pussies lost their money? They weren't as smart as him, and now everyone has gotten what they deserved, including him.

Business is simply an object lesson in Social Darwinism. The strong survive, and the weak will be destroyed. Too bad the rest of society isn't like that. farkheads like you would have been swallowed up a long time ago.


So, basically, if you don't have X-Ray vision, you shouldn't buy anything because you can't be sure it won't bite you in the @ss. Because Goldman Sachs had information about how bad these things were and hid that information, sold them, and then insured them so they could make a profit when they inevitably failed. And for the investors to know that, they'd have needed to work for Goldman Sach's or have x-ray vision. That's why it's fraud.

If Goldman hadn't purposely designed them to fail, it wouldn't be fraud.

/Wants X-Ray vision
 
2010-11-02 03:57:20 PM
69ronpaul420: People like you are what is wrong with this country. I'm sick of this ethics-based bullshiat. Really, we're concerned that a bunch of pussies lost their money? They weren't as smart as him, and now everyone has gotten what they deserved, including him.

Business is simply an object lesson in Social Darwinism. The strong survive, and the weak will be destroyed. Too bad the rest of society isn't like that. farkheads like you would have been swallowed up a long time ago.


Not bad... my first instinct was to respond as if you were serious.

I'm gonna give you 8.3/10
 
2010-11-02 04:08:20 PM
Northern: What a winner may look like. He is the new American hero.

Until somebody shoots him.
 
2010-11-02 04:11:46 PM
I wish this was less about Fabrice Tourre and more about Caprice Bourret
 
2010-11-02 04:38:50 PM
Shocktopus: Mainrodax: "The lawsuit accused Goldman of creating and marketing collateralized debt obligations linked to subprime mortgages without telling investors that the hedge fund Paulson & Co helped choose and bet against the underlying securities."

What?

Read "The Big Short". Excellent book, fast read, and I have essentially no financial education. As in, Accounting 101 confuses me. But that book was a page turner, and I learned a *lot*.


I just finished The Big Short and for the life of me cannot understand how come the CEOs and board of directors of those companies are not now serving 20 years to life in violation of Sarbanes-Oxley. Farking bunch of crooks.

NEVER trust anybody when it comes to the markets
 
2010-11-03 12:25:45 PM
And a drug dealer gets what? Like 10 years?
 
2010-11-03 12:55:55 PM
Hero tag should be for the judge that rejected his request to dismiss based on his 'loophole' precedent.
 
2010-11-03 03:08:57 PM

img218.imageshack.us
RIP Patrice O'Neal


Uploaded with ImageShack.us
 
2010-11-03 03:44:59 PM
would like to echo thag people should read 'the big short'. I'm halfway through and now i understand wtf happened in the financial sector.

Short primer: goldman was greedy, aig was absolutely stupid and led by an egotistical dumbass who squashed anyone who saw the writing on the wall, and the whole entire wall street sector was running a huge huge scam on moodys and the other rating agencies to make their worthless bonds look like triple-a rated gold. Aig was duped by it, and insured billions of these worthless bonds that looked great due to fraudulent ratings.

Then the bonds started going bad - as they were absolutely guarenteed to do in the first place - and the whole sector took a bath.


A few people did see it coming, and a few of those people actually acted on it. They're now billionaires.
 
2010-11-03 04:26:10 PM
Read Big Short as soon as released.
Everything Lewis has written about finance in the last two, three years has been equally illuminating.

Go seek out his articles in Vanity Fair.
(And Liar's Poker too)
 
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