Send a Tweet
Most Popular Choices
Share on Facebook 3 Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 4/20/10

The "Grand Dragon" of them all to Face Charges for Security Fraud

By       (Page 1 of 1 pages)     (# of views)   1 comment
Author 40828
Message Dave Lefcourt
Become a Fan
  (22 fans)

Well. Well. Well! The titan, the "grand dragon" of them all, the formally squeaky clean and unscathed (and unaccountable) Goldman Sachs is about to be brought into the dock to face charges for "securities fraud".[1] The Securities and Exchange Commission "claims the bank created and sold a mortgage investment that was secretly intended to fail"that helped investors capitalize on the collapse of the housing market".[2] Goldman, of course has denied all wrongdoing.

Essentially this is a case of selling mortgage instruments (mortgage bonds) to investors (who naturally expected them to increase in value) and then the seller of the original instruments "hedging" (betting against the instruments) knowing the instruments would turn sour and lose value (and without informing the investor of the impending decline in value), which is what occurred when the "housing market hit trouble".[3]

And thus the bank was covered either way. It's a simplified form of you win, we win, you lose, we still win.

There is no way this writer can fully explain the "Byzantine" workings of present day big time financial capitalism. That's the job for financial regulators (or is supposed to be their job).

The S.E.C. and the major bond rating agencies (Moody's et al) were justly criticized (along with the FED) after the financial meltdown for failing (in their oversight and regulatory authority) to contain the "casino" type gambling that was occurring on Wall Street and nationwide (with the likes of "Countrywide Mortgage" and "Washington Mutual" selling suspect sub prime mortgages to less than credit worthy [and unsuspecting] first time buyers) prior to the housing collapse in the fall of 2008.

But just maybe, this suit brought against Goldman is the tip of the iceberg that could begin to reveal the entire spread of sleaze bag operations by the self styled "masters of the universe". The American people need to begin to feel confidence again in the rule of law that holds "banksters" accountable for their misdeeds, that the people won't be swindled again and their money won't be used again to bailout the financial knaves when the next crisis they create come begging for rescue for their wanton ways.

This is at the heart of Americans' (from "tea baggers" to progressives and everyone in between) lost faith in their government protecting them from the worst excesses of the all powerful financial industry.

The hard working "stiffs" of middle class America go to work everyday, trying to make ends meet, raise their kids, hopefully have enough to send them off to college, pay the mortgage and be law abiding citizens.

They don't understand the inner workings of the financial industry but they do know when they've been had when hundreds of billions of bailouts are handed out by their government to the financial perpetrators and predators instead of these new age "gangsters being "perp walked" and charged with the crimes they committed.

Goldman Sachs being held accountable may be the story of the year. Maybe there is hope after all.


[1] "S.E.C. Accuses Goldman of Fraud in Housing Deal", by Louise Story and Gretchen Morgenson, "The New York Times", April 16, 2010.

[2] See footnote #1

[3] See footnote #1

 

Rate It | View Ratings

Dave Lefcourt Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Retired. The author of "DECEIT AND EXCESS IN AMERICA, HOW THE MONEYED INTERESTS HAVE STOLEN AMERICA AND HOW WE CAN GET IT BACK", Authorhouse, 2009
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

An Ominous Foreboding, Israel vs Iran

The Evolving Populist Political Rebellion in the Arab World

A Nuclear War Would Be Insane

The Rich Get Richer, the Poor Get Poorer, While the Middle Class Gets Decimated

CIA in the Crosshairs

Iran Offers 9 Point Plan to end Nuclear Crisis, U.S. "No thanks".