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Apr. 16 2010 - 12:21 pm | 8,967 views | 8 recommendations | 100 comments

Goldman Sachs Busted

Washington, D.C., April 16, 2010 – The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.

Goldman, Sachs is getting busted, finally, for what to me is one of the most devious and brilliant crimes of the last decade.

I can’t get into this too much because I have other material coming out about it. But the upshot of it is that GS teamed up with a hedgie named John Paulson (no relation) to make the biggest ball of subprime shit they could, got short of it by credit-default-swapping it, then roped third parties into buying it. It’s kind of awesome in a way, and I’m sure it was fun while it lasted.

But now… I’m reminded of the scene in Goodfellas when the cops bust Henry…:

Bye bye, dickhead!


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  1. collapse expand

    We’ll see if this has any traction, considering the ex-Goldman people in the White House and the Fed, heck even in the SEC.

    Not holding my breath on this one, since they are to big to fail.

  2. collapse expand

    Here’s to seeing Matt on every talk show he can book himself onto. This is the story that will define the era.

    Hey, Matt: How about some Giant Squid t-shirts?

  3. collapse expand

    it’s about time.

    or as Nicky (Joe Pesci) says in Casino:
    “But in the end, we fucked it all up. It should have been so sweet, too. But it turned out to be the last time that …guys like us were ever given anything that fuckin’ valuable again.”

    i must say your role in provoking the conversation on this subject was essential. keep fighting the good fight.

  4. collapse expand

    Matt – Thanks for exposing these criminals. I’ve read your Rolling Stone articles on Goldman and couldn’t believe they had never been charged. It looks they might finally get what they deserve.

  5. collapse expand

    I’m a securities lawyer, and I’on this particular case – it’s not all that strong.

    It boils down to whether Goldman misrepresented key facts to investors, and there are some obvious opportunities for Goldman to claim that if investors were misled, it was not Goldie’s fault.

    But that’s not really the point here. The likelihood is that this case will be settled out of court, the weaknesses in the case and the need for Goldman to make it go away make settlement just about inevitable. The key point is that the SEC look at this case as the tip of the ice-berg – they said as much on their conference call today – and will use this to point the way for them to go unearth up some more bodies.

    That’s why Goldman’s shares took a beating, and of the other banking stocks, Deutsche was the only other one that fell significantly. The market has a sense of where the bodies are buried, and now the SEC seems to have figured out how to dig them up.

    • collapse expand

      Yeah, unfortunately no one is going to jail since this is a civil matter. It’s basically the legal equivalent of letting your best friend punch you in the stomach because you nailed his sister.

      In response to another comment. See in context »
    • collapse expand

      What’s the difference from taking shell companies public with the intent to short them into the ground after investment bank offloads the shares on its customers? Arguing that the shell company disclosed all relevant information in its filings with the SEC is short of one material fact. That is, the investment bank new the company was a fraud.

      This type of thing really needs to be stopped.

      In response to another comment. See in context »
    • collapse expand

      It’s a bummer that GS will probably get the equivalent of a slap on the wrist for this, but I did enjoy seeing the “breaking news” on the tele whilst at the gym today. Kudos to you Matt, and to others who have been hoisting up the 4th estate with honest investigative journalism. Go out and celebrate while the victory is still sweet!

      In response to another comment. See in context »
    • collapse expand

      Lets see what would make this weak. A known Hedge fund manager pays picks out the mortgages that goes into the bond. Pays Goldman Sachs. He is not mentioned anywhere in the marketing materials to the pension funds. Both Goldman and Paulson are 100% aware that it has no chance of yielding any return. Goldman pockets the commission for selling it without advising the clinet appropriately of the risks involved. Yeah, weak case I can see it. GS pays $20 Bucks and makes it go away. You know after the Judge threw the 33 Million dollar settlement out the SEC made with GS over B of A, I[‘m highly doubtful this is case that won’t get litigated, unless Goldman is ready to write a check for a number of billions for 1 of 1000 lawsuits that are coming.

      Have they got rid of their Bank Standing yet? Their best chance is to file bankruptcy. That way the managing directors would have one more chance to loot and pillage for their massive priority wage claims. I’d look for that before any settlement. Lets see how fast they can get rid of that regulated bank shit and pop this baby into an 11. Otherwise, The FDIC may have to put it into receivership.

      In response to another comment. See in context »
      • collapse expand

        I was careful not to say that the case was weak – it isn’t – but I’ve seen the SEC produce many clearer slam-dunks than this one.

        First thing to say is that neither Goldie nor Paulson could be 100% sure the CDO would blow up – the point is that they were structuring one that they thought most likely to implode. (That they were right is somewhat beside the point.)

        I’d hesitate to guess whether a court would decide that ACA had, or had not, selected the portfolio; there seems to be a good degree of ambiguity, and the fact stands that ACA did put their name to this role in the end.

        And obviously, if Paulson did not, in law, select the portfolio then much of the rest of the case becomes irrelevant. But even if he did, on every read, I can’t find what I would regard as a smoking gun in terms of saying, “there, that’s where Goldie misled investors”. The SEC outlined that investors were drawing incorrect conclusions, but it’s pretty hard to draw a straight line and say this was because of this here that Goldie did. I was half-expecting to see some fully excerpted pieces from the pitch-book, where the SEC would say x wholly contradicted the reality behind this product, but they produced nothing of this sort.

        One other point on which the whole case is silent is the role of the ratings agencies. Obviously these are highly damaged institutions, but Goldman can surely bring in the fact they looked at this structure. They may not want to, given their tarnished reputation, but equally, the SEC would surely have pointed to some damning communication if someone at Goldie had blatantly rigged the game with Moody’s.

        Still, no-one can imagine Goldie would want this litigated. And I think the SEC would take a large multi-million dollar settlement over the risk of losing in court. That’s why I’d be shocked if this case wasn’t settled out of court, but the bigger picture is if the SEC (and others) see this as a template for smashing into other bankers – even if Goldie gets a pass of sorts on this deal, this is probably round one of many between the bankers and the authorities.

        In response to another comment. See in context »
    • collapse expand

      True these guys will still get away with murder, but since Goldman cares about its reputation, I hope the least the SEC can do is tarnish it forever.

      In response to another comment. See in context »
  6. collapse expand

    “Buh-bye, dickhead.”

    “See you in Attica, dick.”

    Even if their connections to the administration ultimately lighten the punishment, it sure is nice to watch their stock dive today.

  7. collapse expand

    Matt–you must be busy doing cartwheels of joy and air-boxing a knockout to the face of Goldman in your office! Awesome! It better go somewhere and hopefully its not a $5 fine. What are the potential civil and criminal penalties (fines and sentences) associated with this type of fraud? Anyone?

  8. collapse expand

    I think there is a real opportunity for bi-partisanship here. The White House could propose putting in retroactive immunity ala telcos and wiretapping, and the GOP would rush to support the Financial Reform bill with a few modest alterations.

  9. collapse expand

    Maybe this case might turn out to be what NFL special teams call a wedge-buster or gunner. It’s where hard-assed players on the kicking team run down the field and try to knock the Living Shit out of the blockers to get at the ball-carrier. It could be a wedge case to start off working up the financial food chain and nail some big fish later. If they can skin one skunk, some others might start pissing themselves and roll over on some higher-ups. Nothing like the sight of a bunch of rich, over-privileged wienies trying to save their collective asses by throwing their partners-in-crime to the wolves.

    I love the smell of fear in the morning.

    • collapse expand

      It’s a civil suit. No one is going to jail. The article I read said the worst punishment GS will suffer is “reputational damage”. Give me a break! I don’t think that’s enough to make any of these bastards piss themselves.

      In response to another comment. See in context »
      • collapse expand

        This may have been planned by Obama and Goldman, but people who assume they are the smartest guys in the room and have total control over the process sometimes get surprised. There is a shitload of pent up anger out there which is why, politically , they wanted to let some steam off, but this won’t be nearly enough.

        The guy who picked the mortgages to go into this CDO made 7.4 billion in the last 3 years. State attorney generals will be licking their chops. It’s election time. Nah, I think this is when the smartest guys in the room get a book written about them called The Smartest Guys in the Room.

        The judicial branch will want to see this litigated. The SEC is already fighting a bad reputation for piddly ass settlements with the B of A . Then there is the criminal aspect. Fraud is Fraud. The standard of proof is higher, but let’s face it, you have to have ten million to have an account at Goldman. No one is going to cry if it goes poof.

        Besides, the Supreme Court stated unequivocally that corporations are people. It is a terrific time to put that to a test. Can’t throw the corporate stock certificate in jail, but I imagine the directors and the managing directors could act as proxies.

        In response to another comment. See in context »
      • collapse expand

        Yes, it is a civil case. But that doesn’t preclude the SEC from funneling evidence of criminal behavior to the proper authorities. Also consider this: GS is not universally loved by its competitors. They would no doubt enjoy seeing the Big Dog get its balls removed. Investigators and prosecutors, if they are worth their salt, use self-preservation to their advantage. If they squeeze tight enough, the subject will always rat out someone else higher up to take the pressure off or pay a lesser penalty. Remember, the guys under investigation aren’t street-wise gang-bangers who think nothing of pulling a 5-10 stretch for their homies. These guys are rich, privileged softies. They have cash and careers to preserve and they are not about to fall on their sword to protect a higher-up whose job and office they covet. This is just the first brush-back pitch to get the batter’s attention.

        In response to another comment. See in context »
        • collapse expand

          Well said, tremoluxman. These guys, while career criminals, are not hard-ass like down-street criminals but simply money takers hiding behind seemingly conviction proof walls. We can hope it is a serious brush-back and that it might lead to more. But anyway, we’re not even steven till Geithner and Paulson are outed and down’d; and till the too big to fail and the too connected to fail guys fail and their entities are dismantled. Though I voted for O’B and had such high hopes, his “look forward, not backward” applies so completely to corporations and the top officials of the former administration and his own banking buddies and his new pharma and insurance buddies and all the usual b.s.; and his obvious warmth with the idea of corporate cartels as opposed to true competition (across the boards) gives me little confidence in outcome. As implied above, the serious exceptions his judicial department is making to end whistle-blowing while failing to end the run of free-riding big fish is disheartening, God speed, SEC, and please god, let there be others out there to pursue these matters.

          In response to another comment. See in context »
  10. collapse expand

    Let’s remember the SEC works for Obama

    and no doubt the SEC folks, GS execs, and Obama insiders all laid their insider bets down prior to announcement of this lawsuit

  11. collapse expand

    Seems huge. SEC cc was surreal. GS response was classic GS: “charges completely unfounded in law and fact…” So true, I could never imagine they would fail to cover the legal logistics surrounding this conflict of interest potpourri. The charges are founded as unethical definately, but, given GS’s history, their bullet-proof vest is substantially thick.

  12. collapse expand

    This has to be the same “Paulson” douchebag that owns most of AngloGold Ashanti, no??? He should be in jail already for paying off warlords, destroying the Congo environment and keeping its residents in squalor!!!

    But nothing will happen to him I’m sure….

    e

  13. collapse expand

    This has all been orchestrated by that shit bumm Obama to push thru financial reform so Obama can do for corporate america what he did for health care…..

  14. collapse expand

    like a first pitch strike on opening day, this is an excellent start, but there is an awfully long way to go to get to the bottom of this.

    the obvious cynical question is how many insiders knew about the announcement and shorted the hell out of gs stock this morning?

  15. collapse expand

    Just saw this story on the front page of HuffPost and it got me thinking. Articles on the “foreclosure crisis” talk about thousands families loosing their homes as if it were just a sad but inevitable side-effect of the recession, while articles on the investors losing their ass on those same mortgages are talked about as if they are “an outrage” and “a criminal offense” perpetrated by the big banks. Why is it a criminal offense to mislead investors but business as usual to mislead borrowers? Earlier this week the banks told the senate they can’t pass a bill to help families in danger of foreclosure because the families “promised to repay,” and now the banks are being charged with a crime because the people who invested in those mortgages are pissed? Hows that for a double standard?

    • collapse expand

      If HuffPo finds a way to make big red fonts any bigger it’s going to take thirty turns of the scroll wheel to finally get to the story.

      In response to another comment. See in context »
    • collapse expand

      Your comment made me think about this quote I recently came across:

      “Capital must protect itself in every way…Debts must be collected and loans and mortgages foreclosed as soon as possible. When through a process of law the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law applied by the central power of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principal men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd.”– Taken from the Civil Servants’ Year Book, “The Organizer” January 1934.

      In response to another comment. See in context »
  16. collapse expand

    Hoooo F-ing RAY!

    I don’t hold much hope of this case directly putting a hurt on Goldman, but if its settled, it opens up the doors for considerable civil suits that could put quite the hurting on Lord Blankfiend and his crew.
    I hear hell is constructing a new inner circle specifically for these guys, but in my opinion, no matter how bad it is, it will be too good for them.

  17. collapse expand

    It’s a start. Would rather see criminal charges (of course). Couldn’t they get them for racketeering?
    Still…about fucking time!

  18. collapse expand

    I’m going to hit the Eternal Snooze button here by asking to be awakened when criminal trials of individual, high-ranking Goldman Sachs execs begin.

    [rolls over, resumes snoring]

    • collapse expand

      This guy is a moron. G$ certainly isn’t the only crook here, but they were one of the worst. I about lost my lunch when I read that ‘G$ didn’t even want the money’ and then my senses were utterly confounded to a grinding halt when I saw him allude that this was an anti-semitic attack on G$!! WTF! All that was left after that was blind rage.

      These guys originated shit mortgages, packed them up and bundled them into securities, pressured or outright bribed rating agencies to stamp them AAA and AA+, then sold them to investors that believed they were actually investment grade bonds. Then they shorted the whole thing against the schmuck counter parties at AIG! It’s just that fucking simple. It’s prosecuting fraud, not scapegoating and anti-semitism!

      I can only fully expect that G$ will not be the last company to be implicated, cause I’m sure all the big players jumped on this bandwagon and it’s just a matter of time until they get caught IF, and a big IF, the SEC and FBI actually does their job.

      In response to another comment. See in context »
    • collapse expand

      That’s gotta be the dumbest thing I’ve read in a while. The guy suggests there is anti-semitism at play, then says he’s not suggesting anti-semitism. Huh?

      In response to another comment. See in context »
    • collapse expand

      “Dennis (O’Brien) is the Executive Producer of News and Documentaries at HDNet, the all high-definition cable / satellite network owned by Mark Cuban. He produces HDNet World Report, the network’s signature weekly news broadcast…”

      http://www.huffingtonpost.com/dennis-obrien/#blogger_bio

      “Mark Cuban was born in Pittsburgh, Pennsylvania and grew up in the Pittsburgh suburb of Mt. Lebanon, in a Jewish working class family. The family’s last name had been shortened from Chabenisky when his grandparents immigrated from Russia to America.”

      http://en.wikipedia.org/wiki/Mark_Cuban

      “In the wake of the Yahoo sale, Cuban had other things on his mind than Broadcast.com’s fate. He and Wagner went to Goldman Sachs and had the investment bank structure a collar – selling calls and buying puts on Yahoo stock – that locked in the value of their paper profits.” (Those profits exceeded $2 billion)

      http://money.cnn.com/2007/10/03/news/newsmakers/mark_cuban.fortune/index.htm

      This is not merely incest, it is intellectual and moral debauchery. And, Yes, I think they fucked goats, too.

      In response to another comment. See in context »
  19. collapse expand

    Don’t get your killer juices flowing too much Matt. The game isn’t played the way it appears. Most of us that trade in this game know that the “news” breaking today is all staged. Its only red meat for the uninformed. Goldman knew this was coming and probably even had a hand in its realease today. This is a much bigger scheme than this. After all how do you apply what should be given here…..RICO.. Of course you can’t. RICO is federal and guess who is in bed with GS right now. Thats right. The highest of the high…..So I wish you were right that justice would be served. But this is only a joke. Just red meat for the sheeple. Mainstream Media will howl for awhile while “justice” is served. Lloyd will take away the bonus from the janitors at GS to pay the fine.

  20. collapse expand

    Matt, I saw the headline and thought of you. Will anything of merit come out of this? Fines? Whoopty doo. Paying people back? Jail time?

    Thank you for the great articles, and I hope you get your party on later.

  21. collapse expand

    Some guy just now on CNBC to discuss Goldman Sachs very calmly (yet rudely) blasted Cramer and the network. Said something like, “Well, I see I’m the only one here not on Goldman’s payroll.” I didn’t catch his full name, but at the break, Burnett said, paraphrasing, “Sylvan will not be back for the next segment. You gotta be more polite.”

    The next few days are going to be fun. The CNBCers are falling over themselves to downplay this. Cramer just said, again paraphrasing, “Of course at the bottom of all this are the fradulent home loans.” Trying to paint the guys who bought too much house as the scandal, as if Moody’s and S&P had no choice but to give the suicide loans AAA ratings. These CNBC guys would sell their own mothers to protect Goldman, et al.

    • collapse expand

      I saw that CNBC segment also. It was so good that I ‘rewound it’ to see it again. The guy’s name is Sylvain Raynes. He is a writer and quant. My favorite line of his on CNBC was when he told them “I’ll keep it shallow in deference to Mr. Cramer”. Ouch. I don’t know how Mr. Raynes got on the show since the others were all Goldman apologists but I am a Sylvain Raynes fan now.

      In response to another comment. See in context »
      • collapse expand

        After I saw the headlines about GS getting charged I thought “I’d best turn on CNBC. Now.”
        I had it on in the background while doing housework and heard this Sylvain guy. He was pretty damn funny. Yeah, I did the rewind a few times.
        The whole thing was an embarrassment to CNBC though.
        Oh, silly me. Like they can be embarrassed.

        In response to another comment. See in context »
  22. collapse expand

    You guys sure get excited easily. Goldman is reported to have bilked investors out of a billion dollars. In a few weeks the SEC will announce that Goldman settled the case for 100 million and add some fluff about how its the highest settlement of its kind or some such immaterial nonsense and then it will be back to business as usual.

    Despite all the uproar it will come down to the equivalent of paying the vig on a bet that was still hugely successful.

    You gotta love this game!

  23. collapse expand

    Matt and others–here is the question thats begs to be asked–If GSCO was doing God’s work,as Blankfein stated last year,and GSCO was working for Paulson,does that make Paulson God ?? This question was put to me by a very good friend—-Any takers ??

  24. collapse expand

    So let’s all hold our breath while GS stops making political contributions to Obama and the demokrats

  25. collapse expand

    Prior to the October revolution 1917, Lenin wrote:
    Without big banks, socialism would be impossible. The big banks are the states apparatus which we need to bring about socialism, and which we take ready made from capitalism….
    http://hope.dukejournals.org/cgi/pdf_extract/4/1/252

  26. collapse expand

    Matt, you deserve a Pulitzer for your reporting on GS. You left the weasels in the establishment press in the dust on this story, not that any of them will admit it. Keep up the great work!

  27. collapse expand

    well not to kiss too much ass; but I hope Matt gets a Pulitzer or SOMETHING for being the “Cassandra” screaming about these crooks all along….

  28. collapse expand

    This is great news but frankly we don’t even bother to penalize our war criminals so it’s hard to see much coming of it.

  29. collapse expand

    A shout-out to Matt from Charlie Gasparino at 2:30 (the second video, not the Tila Tequila interview…):

    http://www.businessinsider.com/this-is-what-fox-business-news-was-airing-when-the-goldman-news-broke-2010-4

  30. collapse expand

    We can rein in Wall Street crooks overnight in one very simple way: Sentence them to hard time in maximum security prison. No more minimum security resorts.

    After 3 nights as some hard criminal’s girlfriend, they’ll be “reformed” and walk the straight and narrow (once they can walk again) for the rest of their lives.

    Anyone got a better deterrent to Wall Street crime?

  31. collapse expand

    Pecora Investigation Anyone????…. We need someone with the sophistication, perseverance and prosecutorial brio to go after all of the invisible decision makers who will continue to try and cover up their genitals like they are a 4-man wall awaiting Roberto Carlos’ left foot…

  32. collapse expand

    Sadly, that scenario seems highly probable.

  33. collapse expand

    Personally, I’d be all in favor of skipping the trial etc if GS would agree to a plea bargain arrangement: the responsible parties would all be lined up as everyone who’s lost a job, a home, etc. walks past in single-file and administers a righteous cock-punch.

  34. collapse expand

    And check out what happens when Hitler finds out about Goldman Sachs . . . http://www.youtube.com/watch?v=qV0OYZVa3PA

  35. collapse expand

    Here is The Nation’s take on the Goldman bust: Marco

    Will SEC Crackdown on Goldman Spur Senate Action? posted by John Nichols on 04/16/2010

    The news that the Securities and Exchange Commission has charged Goldman Sachs with fraud is to be celebrated, as it represents one of the first significant responses by federal authorities to the abuses that created and extended the financial crisis.

    Coming at a time when the Senate is preparing, finally, to begin a too-long-delayed debate on regulating an out of control financial industry, the SEC’s civil lawsuit against the Wall Street powerhouse — which charges that alleging that Goldman Sachs let a large hedge fund include risky subprime mortgages in a financial “product” and then failed to disclose this to the product’s buyers — sends an important signal about what regulators can and should do.

    As Vermont Senator Bernie Sanders says: “While its action was slow in coming, I applaud the SEC for finally beginning to deal with the illegal behavior of major Wall Street firms which, in my view, knowingly sold junk products and as a result helped cause the worst recession since the 1930s.”

    But the regulators need more tools and more prodding from Congress to crack down in a manner that will change the way Wall Street does business.

    That’s why Sanders and a number of other senators are fighting to strengthen legislation that is too weak, too compromised and too influenced by the demands of lobbyists for financial-services firms — including Goldman Sachs.

    Here’s how Sanders is looking at the coming fight:

    The greed and recklessness of Wall Street has created the most severe economic recession since the 1930s. Millions of people have lost their homes and savings, and 17 percent of our people are unemployed or underemployed. Wall Street is now spending billions of dollars on lobbying and campaign contributions to make sure that they can continue to act in the reckless and unregulated manner which led us to where we are today. We cannot allow that to happen.

    Among other very important reforms, Congress must stop big banks from ripping off consumers by charging credit card interest rates of 35 percent or more. That is why I will offer an amendment to stop usury in America and place a reasonable cap on what lenders may charge credit card customers, similar to the limit already in place and working well for credit unions.

    Here’s how you can help. Members of Congress definitely will hear from the big bankers and their well-paid lobbyists. I think they need to hear from you too. They need to hear about your real-world experiences with these loan sharks in three-piece suits. Let me know how credit card companies have treated you, and I will read some of your stories on the Senate floor.

    There also must be greater transparency at the Federal Reserve. The Senate banking committee chairman wants to allow the Government Accountability Office to audit the Fed’s emergency lending programs, but bar GAO from naming loan recipients and detailing the terms. That’s not good enough. As long as the Federal Reserve is allowed to keep secrets about its loans, we will never know the true financial condition of the banking system. The lack of transparency could lead to an even bigger crisis in the future.

    The financial reform bill also falls short on breaking up financial institutions considered “too-big-to-fail.” For the most part, the proposed legislation would let regulators intervene only after a financial institution was on the verge of collapse. We cannot wait for the next crisis to solve this problem. We have got to take action now.

    We also should insist on an independent agency to protect financial consumers. Putting such an agency at the Federal Reserve is like putting the fox in charge of the hen house. Congress already has given the Fed the chance to enforce consumer financial protection. It failed miserably.

    Finally, the financial reform bill does not do nearly enough to reform credit default swaps and other arcane financial products that led to the collapse of Lehman Brothers and Bear Stearns, resulted in a $182 billion bailout of American International Group, and precipitated the worst financial crisis since the Great Depression. Many of these financial weapons of mass destruction don’t just need to be regulated, they should be banned.

  36. collapse expand

    Investors in the liabilities of ABACUS are alleged to have lost more than $1 billion.

    The SEC’s complaint charges Goldman Sachs and Tourre with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.

    So depending on the size of Goldman’s fines when this is said and done will determine whether the soundtrack to this episode is the Chorus to Handel’s Messiah or… uhm… this sound (http://www.youtube.com/watch?v=1ytCEuuW2_A)

  37. collapse expand

    Matt – Congratulations on seeing some progress from your efforts. I don’t think these charges would have come down without tenacious reporting, much of it on your part. Enjoy the vindication and additional notoriety. I enjoy see Vampire Squid references popping up. I want that T-shirt with a picture of the squid behind bars.

  38. collapse expand

    Congrats Matt. I seriously doubt this would have gone anywhere if you hadn’t taken all that shit to get this off the ground. I’m thinking Pulitzer here.

  39. collapse expand

    I work for a Securities Firm and am held hostage by CNBC all day. Yet, finally, a guest that does not shill for Wall Street fell through the cracks and insulted that clown, Cramer. Of course, he was kicked off the show immediately. Can someone please do a expose on CNBC – who apologizes for Wall Street every day. If Santelli blames this crisis on the home owners one more time, I will probably be fired because I am always yelling at him. Please, Please. CNBC is killing me, but I need my job because I never shorted the market. Just a poor schmuck with no inside info.

  40. collapse expand

    The more I learn about the SEC’s civil complaint against Goldman Sachs, the more concerned I am about the absolute institutionalized nature of Wall Street. I know many here (and of course Matt) have been saying it for months that Wall Street is rigged and corrupt but this whole Goldman thing brings it to a whole another level.

    As far as I can see, Wall Street is run by managers and entrepreneurs who run their respective concerns just like La Costa Nostra.

    To me, the most troubling aspect of this story is not what Goldman Sachs did or didn’t do (we all know what they’re about and the fact that the SEC just caught up to them on this one minor matter is a finger in the dam); rather, it is the whole story of John Paulson and how he made $4.8 billion in just over 3 years.

    It’s funny as I always here the Wall Street crowd always state that capitalism is not a zero sum game. The Paulson story shatters this illusion. Indeed, my retired aged Mother who lost nearly half of her retirement savings used to ask me where her money went. Put simply, if she lost $100K, who took her $100K?

    I now know the answer: John Paulson and the people like him.

    The fact that this guy slides by and nothing happens to him just demonstrates how our system is doomed. Wall Street doesn’t need reform. It needs rebuilding.

    After making nearly $4.8 billion, Paulson gives $15 million to a homeowner’s foreclosure group – what an insult. This is really no different than the mafia giving the widow of the guy they just killed $20K to ease her pain.

    Until we get to the Paulson’s of the world, nothing will change.

  41. collapse expand

    Matt, you are my goddamned hero! I seriously do not believe these charges would have been laid against GS without your reporting. Sure, it would have come out eventually, but it would have been some scaled down bs charge.

    These charges have the potential to change how business is done in our country and perhaps others. These charges are due, in a large part, to your work as a journalist.

    You deserve some type of award or medal, sir. I personally hope you get to enjoy your success on some nice beach somewhere with a ton of beautiful women to keep you company.

  42. collapse expand

    You are the Army Ranger of investigative journalism. Your mother must be proud and I want to commend and thank her for the fine job on raising such a courageous and caring son. Thank you for protecting America from the banking thugs. We have your back.

    Ranger Mom

  43. collapse expand

    Lloyd, The Anointed One, is still worth in excess of G$ 275,000,000.00. That’s a lot of party for an idiot barely able to ungarble his own moniker 2 weeks ago on capitol hill. The only interesting question is who in our esteemed Public Service Sector is going to do a legal Matt Taibbi to these rectal carcinogens from G$,JPM,MS, and the rest of the BOAlphabet?

  44. collapse expand

    It’s amazing to see the major news outlets reporting this as if they just discovered it. They have commentators explaining it and all of it very low key – what’s missing is the honest reporting that Matt did to make analogies that stuck in our minds like a “giant squid funnel.” I doubt, as others have said here, that this case just goes away – it is a strong case. Any time an entity or individual has superior knowledge to the party who relies on the representations of the party with superior knowledge and those representations are misleading, even false, for the purposes of and do actually draw detrimental reliance from the innocent party and the innocent party is damaged – that’s what we have here, exactly.

  45. collapse expand

    SEC frowns on spitting on public streets.
    This bullshit charge is like littering! On a global scale, what this indictment conceals are ten thousand Birmingham Alabamas. In the early part of this decade, GS sent out hundreds of lawyers to work up their skeevy plans. Loopholes are exploited through relatively small fines throughout the world. Citizens are forced to bear the enormous costs through increased water fees, sewer fees and utility surcharges marked up to pay off interest (and bribery costs) alone. The underlying increased debt may be what Lloyd “God’s Work” Blankfein was talking about as sovereign treasuries are forced into crippling debt financing, just like we do here in the U.S. God’s work, indeed! It’s fraud, pure & simple. And the BIG smart money will for a generation be in shorts.

  46. collapse expand

    Many commenters are defending GS!
    but its a catch 22 isn’t it?
    Guily or stupid
    Obama says they are savvy guys
    Investors desrve a lower tax rate than he pays because they are investors
    Washington says we need these banks
    Gail Collins says we should thank them because their 15% of their earnings pays alot of tax revenue (thank you magnetar investors?)

  47. collapse expand

    SOMETHING TO CONSIDER

    CIVIL FRAUD EASIER TO PROVE THAN CRIMINAL

    BUT

    IN CIVIL FRAUD, THERE IS A LAW CALLED CONSTRUCTIVE FRAUD
    WHEN ONE OR MORE SEEMINGLY UNRELATED PARTIES INVOLVE THEMSELVES IN A PLAN TO DUPE OTHERS. THE LAW OF CONSTRUCTIVE FRAUD IF APPLICABLE WOULD REEL IN PAULSON BASED ON THE CURRENT INFORMATION OUT THERE.

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    I'm a political reporter for Rolling Stone magazine, a sports columnist for Men's Journal, and I also write books for a Random House imprint called Spiegel and Grau.

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