Federal prosecutors have opened an investigation into trading at Goldman Sachs, raising the possibility of criminal charges against the Wall Street giant, according to people familiar with the matter.
While the investigation is still in a preliminary stage, the move could escalate the legal troubles swirling around Goldman.
The Securities and Exchange Commission, which two weeks ago filed a civil fraud suit against Goldman, referred its investigation to prosecutors for the Southern District of New York, which has now opened its own inquiry.
Goldman has vigorously denied the accusations by the S.E.C., which accused Goldman of defrauding investors involved a complex mortgage deal known as Abacus 2007-AC1.
Something to watch. And maybe celebrate.
Cris
I like the spelling in the URL (“goldamn”) better than the correct post title.
area man
Typo or no, “Goldamn” is a rocking tag name candidate :)
Fabulous Fab and the fulminating Senators was fun to watch but I still crave vengeance for my 401k. And a pony. Also.
de stijl
The situation will never improve on Wall Street until people who are, in fact, guilty of criminal fraud go to real, no-foolin’ around, federal prison.
CEOs are not exempt, why should MOTU traders & their supervisors be?
Mike Kay
this only shows that Obama is in the pocket of goldman.
/firebagger.
Yutsano
This could open up a can of worms. Think about the number of fingers Goldman has in our financial system, now think of who has ties to all of that. The web spreads not like a vampire squid but like one of those huge spiders they have in the Amazon rainforest. Either way I’m keeping the popcorn a comin’!
Splitting Image
As much flack as the administration has taken (from people like Taibbi) for not executing the Goldman execs on the spot, I’d really rather they took their time and made sure it got done right.
We may very well be disappointed in the end, but I’d rather work on getting our ducks in a row before trying to prosecute. Those assholes have had decades to make the law say what they needed to get away with murder.
mai naem
I watched Erin Burnett and Mark Haines interview Richard Trumka yesterday. Erin Burnett could not stop defending the bankstas and trying to get Trumka to say that the unions were responsible for this too. Absolutely no disclosure about Burnett having worked at Goldman. I thought she was better than Maria Antoinette Bartiromo, now I don’t quite know who’s worse.
Mike Kay
@mai naem: burnett is evil.
http://www.thedailyshow.com/watch/thu-august-16-2007/great-recall-of-china
fast forward to the 3:15 mark.
John Cole
@mai naem: Jay Rosen’s crew fact-checked Erin Burnett and almost everything that oozed out of her mouth was factually inaccurate.
beltane
@Mike Kay: You bet. Right now, Jane sez Obama has thrown Latinos under the bus. He probably fed them a shit sandwich there, too.
mclaren
Kabuki.
beltane
@mai naem: They are both paid PR representatives for Wall Street. Neither is better nor worse than the other; just different styles, that’s all.
Mike Kay
@beltane: that’s how she raises money – manufacturing outrage against “the man”.
beltane
Goldman has been hiring former federal prosecutors for years. They have the best lawyers in the world helping them follow the letter of the law while violating the spirit of the law. The only hope for the feds will be if GS finally became sloppy in its arrogance.
mr. whipple
I always thought Burnett is just stupid, while Bartiromo is evil.
asiangrrlMN
A ray of hope? Tiny at best. Still, better than none, I guess. Someone tell me a joke please. I need a laugh.
Yutsano
@asiangrrlMN: Two guys walk into a bar, which is kinda funny, cause you would think after seeing the first guy the second guy woulda ducked.
:: rimshot ::
Okay not my best work. But hey at least I tried!
Hi hon, gonna go stuff my face for a few then I’ll be back.
Just Some Fuckhead
Jesus God, you retards are turning something as joyous as a Goldman Sachs investigation into a resentful mess about Hamsher and poor Obama being imaginarily dissed?
Brandon
Just as a matter of technicality, if the SEC makes a referral to DOJ, isn’t DOJ obliged to “investigate” the referral or “open up an investigation” into the claims made in the referral? This is far, far, far from a decision to prosecute.
Omnes Omnibus
@beltane: Ever listen to traders talking about how lawyers are too dumb and mathematically unsophisticated to understand what they are doing? Well, that means they do things that the lawyers haven’t approved. At that point, the GS lawyers are defending or looking for justifications for things that have already been done. For me, the bigger concern is that GS sacrifices a few small fry and the big ones skate.
Punchy
If you think this will actually lead to anyone actually spending 1 day in jail, you’re one naive/ignorant fellow…..
mr. whipple
@beltane:
I could be very wrong, but it seems to me that GS had a license to print money, so for them to counterfeit would just be unnecessary.
Mike Kay
@Just Some Fuckhead:
“retards”
is this RAHM!?!
Mike Kay
@mr. whipple: you got a point there. she’s cute and flirts so she gets a leg up (no pun intended) over competent but plain looking people. It’s the Palin principle.
El Cid
For some, every opportunity to repeat the same jokes on every single subject under the Sun is an endless source of hilarity. Or daring. Or something.
Pigs & Spiders
Damn your Pirates, John, damn them to heck!
Mary G
I still wonder why there have been almost no stories, let alone perp walks, against the rating agencies. I know John has brought this up a number of times, but Congress needs to have hearings with them and read the e-mails about “cows could have structured this deal and we’d rate it” into the record.
Then do some regulating or legislating where if Moody’s or S&P puts a AAA on a bond and it goes belly up, they have to pay the government ten times the fee they got for rating it as a fine. Plus damages to the purchasers who relied on the ratings.
One of my biggest WTF moments of the last couple of years is when one spokesman defended their failure to accurately forecast performance of something from Bear Stearns or Lehman by saying that their “quants” had used extremely sophisticated math formulas to evaluate these items, which worked fine, except for the fact that the formulas hadn’t taken into account the possibility that the prices of houses might go down. WTF!
Prices of anything that go up steeply always come down in a crash. That’s why they call them bubbles. Bubbles pop and disappear. This has been going on for centuries. Tulip bulbs from Holland are one example, not to mention the S&L crisis in the 80s and the dot com crash in the 00s.
As the system currently works, the people who issue the bond pay the raters, a situation screaming for fraud and abuse.
demo woman
@Just Some Fuckhead: You might be too harsh. Comment #4 made a comment and comment #10 responded. I might be wrong but that’s pretty much it.
By the way … Wall Street investors suck!
Chuck Butcher
Are gallows involved?
If not get back to me…
scav
@asiangrrlMN: How do you catch ghosts underwater?
Scooby Diving.
Sorry — days spent baby-squishing a 6 and 4 year old.
The Main Gauche of Mild Reason
The future Mrs. Peter Orszag, Bianna Golodryga, isn’t much better.
BethanyAnne
gah, can’t comment back in that Apple thread. Page keeps not rendering right, and waiting on “change-production.s3.amazonaws.com”. Garumph.
beltane
Even in the event this investigation results in an eventual conviction, I wouldn’t be surprised if it was overturned on appeal. The NYC legal and investment bank communities are just as tightly knit as anything in DC. It’s hard not to be cynical.
de stijl
@scav:
Mr. Whipple would surely tell you, “No more squishing the chirrun!”
BethanyAnne
I should ask a question instead. Is the “Here’s a Question” thread broken for anyone else?
BethanyAnne
I don’t think it’s the amazon server causing the problem. This page is waiting on it, too. Mebbe it’s something in the last comment fubaring the page?
scav
@de stijl: When I sit on a kid, they stay squished. Feature, not a bug. But it is true that Mr. Whipple hasn’t called me back (my cousins however . . . ). IKEA flat-pack IKIDAs
PeakVT
@BethanyAnne: Yes, and thank goodness.
ksmiami
Nagging questions always remain, why did it happen and who was to blame?
burnspbesq
@asiangrrlMN:
Q: Do you know why blonde jokes are all so short?
A: So drunk guys can remember them.
soonergrunt
OT–It looks like the State Republican parties of Oklahoma and Arizona are having an intramural contest in just how regressive and batshit insane they can get.
Oklahoma Breathing While Not-White measure in state house.
soonergrunt
@BethanyAnne: It’s broken for me.
Yutsano
@ksmiami: Never mind.
burnspbesq
Ideally this will be the last we hear of criminal investigations for a while. The proceedings of Federal grand juries are supposed to be secret. Even people you would gladly lynch without a moment’s hesitation are entitled to the presumption of innocence. If it doesn’t exist for them, it doesn’t exist for you.
jrg
The CEO of Goldman was on NPR today, describing their money-making machinations as a “water faucet”, saying that “you just turn it on and expect it to work”.
When it breaks, he said you learn as little as you can to fix the problem, and move on.
He was basically saying that they hold themselves to a lower professional standard than plumbers (or anyone else who has to understand something for a living). Details are for the little people, I guess.
Next time that fucking idiot crosses over a bridge, I hope he considers the fact that other people taking their jobs seriously is the reason he’s alive.
burnspbesq
@soonergrunt:
Bear Down! Boomer Sooner! Rah-rah-rah!
asiangrrlMN
Snicker. You guys are teh funny. Ta!
Yutsano
@burnspbesq: You left out SUNDEVIL PRIDE!!
Americanadian
“Breathing While Brown” might make a useful tag if these racial-profiling laws start becoming popular across
the CSAvarious Republican-governed states.oklahomo
@soonergrunt: Sadly, Oklahoma will win this contest: our bench is much deeper.
burnspbesq
@Yutsano:
I didn’t know there was such a thing.
(ducks)
Yutsano
@burnspbesq: Well they did hire Dennis Erickson, so you may indeed be on to something there.
Mr Furious
@BethanyAnne: Yep.
It’s Steve Jobs’ fault.
de stijl
@jrg:
Unless you’re Goldman Sachs, you’re little people.
Keith G
But The Big Dog is skeptical. He sayz the timing of the investigation is suspect..
Funny how my brother now cares what the Cleinis has to say.
soonergrunt
@oklahomo:
Is it just me, or is KFOR starting to become somewhat liberal, or at least somewhat less batshit? I can’t think of any one detail except the story tonight about the I-40 repairs and how the lege hadn’t funded them for years and now I-40 is getting fixed because of federal stimulous money. The story I linked to is titled “Immigrant racial profiling bill for OK.” That and a couple of other stories they’ve run this week art starting to make Linda Cavanaugh and Kevin Ogle sound like they aren’t from these parts.
Platonicspoof
@BethanyAnne:
Yes; there’s a delete line through all text after comment 90 in the “Question” thread.
Test comment in “What I was afraid of” never appeared.
Using IE 8 and XP.
Reply and comment worked for me in John’s post about acrophobia while gutter crawling.
Mike Kay
@Keith G: oh brother. I wonder how the PUMAs will react to that.
Clinton must have received some hefty contributions to his foundation.
BethanyAnne
@Mr Furious: ha!
oklahomo
@soonergrunt: I honestly think the monied conservatives realize that we as a state are terminal without federal stimulus. I live in Sequoyah County, and we are dead in the water. The sheriff threatened to close the jail because they had no money. The towns have no money. The county has no money. The meth labs are out of control again. And I40 has just been destroyed by the big trucks. A lot of rural people are going full-on teabagger, and I think the old money conservatives realize their heads will go on pikes, too. I’m waiting for the Völkischer Beobachter oops the Daily Oklahoman to weigh in. 50-50 they will go full-on stupid.
I guess my gut feeling is they won’t be able to contain the crazy here: you should have read the small town editorials and letters to the editor during the 2004 elections when the Rove tactic of gay marriage on the ballot brought the loonies out in force.
I think the crazy ship has sailed, and all KFOR can do now is scream “Iceberg ahead!”
oklahomo
@soonergrunt: FYWP, I must have used a forbidden word. In short:
I think the crazy ship has sailed, and all KFOR can do now is scream “Iceberg ahead!”
Mnemosyne
@Mike Kay:
No need — his future son-in-law works for Goldman Sachs. Nepotism, the world’s second-oldest profession.
fortygeek
@BethanyAnne:
Yes…the Apple thread is broken after comment #106.
steve
@El Cid:
“April 29th, 2010 at 10:43 pm
El Cid
For some, every opportunity to repeat the same jokes on every single subject under the Sun is an endless source of hilarity. Or daring. Or something. ”
It is! Saying also too to everything, or good news for conservatives is extremely funny the 800th time someone does it. It doesn’t at all suggest the commenter is an idiot.
fourlegsgood
@oklahomo: I live in Texas, which makes me sad much of the time, because teh stupid is strong here.
But I must say that Oklahoma has us beat in that department 6 ways to Sunday.
My condolences.
fourlegsgood
On topic, is it a done deal that Goldman guys will do a criminal perp walk?
Well, no. But in my experience, the SEC doesn’t refer things to Justice unless they think there’s a pretty strong case.
So I haz a hope.
J. Michael Neal
@burnspbesq:
ORLY?
Three mathematicians of my acquaintance were in a bar in Des Moines one night, debating the very question of whether or not blondes are really that dumb. One of them was absolutely insistent that it’s true. Blondes really are dumber than everyone else.
They decided to resolve this debate by asking their blonde waitress a question, to see if she could answer it. (At this point in the story, retold by one of the participants, my training as a statistician compelled me to utter the words, “Small sample size,” but he breezily ignored me.) All they had to do was to settle upon a question. Being mathematicians, they agreed that any reasonably intelligent person should know the integral of x.
With that consensus, they were set to ask the waitress their question the next time she came around to take their orders. The particularly belligerent one stepped out to the men’s room before the event. While he was gone, the other two decided that they were going to pull his leg. They called over the waitress, and one of them said to her, “In a few minutes, our colleague is going to ask you a question. When he does, tell him that the answer is one half x-squared. Can you remember that?” She nodded, and assured them that she could.
So, when their buddy got back, the waitress returned, and asked them what they wanted to drink. They ordered another round of beer, and the one said to her, with a cruel smile on his face, “We have a bet going. We want to know whether you can tell us what the integral of x is.”
“Oh, sure,” she replied cheerfully. “The answer is one half x-squared. Plus an indefinite constant.”
Brachiator
@fourlegsgood:
Not a chance in Hell. The Republicans and Democrats both gutted most of the 80s laws that saw corrupt S&L’s shut down and which led to at least a few criminal prosecutions.
Today, even civil prosecutions will be rare, let alone criminal prosecutions.
Also, Goldman Sachs is as much a UK company as it is an American one. The British elections are next week. That outcome, as much as anything happening here, will help determine future courses of action against Goldman.
kay
I don’t think it’s good news at all that the referral is in the newspaper. The NYTimes makes it sound like the leak came from the SEC. I guess that’s better than the DOJ, but not by much.
This is why I hate congressional calls for criminal investigations against private parties or entities. It’s always recited as cause and effect: Congress calls for criminal investigation, referral made. It discredits the whole process. I don’t think Congress should put themselves in that position, as a step to a grand jury, no matter the target.
I’d rather Congress investigate the executive branch regulatory agencies that dropped the ball. That’s well within their area of oversight. They shouldn’t be calling for criminal investigations of private parties. I would think they’d have enough to do looking into our captured regulatory agencies.
Pococurante
This will be a show investigation. Goldman isn’t Martha Stewart. It takes a quantum microscope to tell where Goldman ends and our government begins…
soonergrunt
@J. Michael Neal:
Ahh. Mathematician humor, FTL.
kay
I’d like Congress to perform their actual oversight function and find out if agency heads and managers in the federal regulatory agencies are captured, or, actually, to what extent they’re captured.
I understand why they want to dress down Goldman and then make unhelpful public proclamations having to do with criminal investigations, but I’m not impressed.
I don’t understand why they can’t fulfill their oversight role. There were regulations, as toothless as they may have been. They weren’t enforced. They’ve established that. What happened?
This is starting to pile up. We have auto safety regulations that aren’t enforced, we have mine safety regulations that aren’t enforced, we have food safety regulations that aren’t enforced, and I have no idea where the financial regulators were. Might be time to look at the regulatory agencies, since Congress has a clearly defined and proper role there, rather than veering into opining on criminal investigations.
qkslvrwolf
Will any of those fuckers lose all their assets? No? Then there is nothing to celebrate.
Jump, you fuckers.
grumpy realist
Ok, I have to add this one:
Q: What’s purple and commutes?
A: An Abelian grape.
AnneW
Late to the party, but:
Q: What’s yellow and equivalent to the Axiom of Choice?
A: Zorn’s Lemon.
And my personal favorite,
Q: What’s nonorientable and swims in the ocean?
A: Möbius Dick.