Tuesday, June 8, 2010

Vowing not to be 'chumps,' commission subpoenas Goldman's records

Tags: Stonewalling, goldman sachs, sold $40 Billion Mortgage Backed Securities, Not Informe SEC, subpoena, government commission, 2.5 Billion Documents Dump

By Greg Gordon | McClatchy Newspapers

Vowing not to be 'chumps,' commission subpoenas Goldman's records

Goldman Sachs Dumped 2.5 Billion Documents without an Index, a common corporate attempt to hide indictable documents.

Goldman Sachs stock is in a free-fall. It seems that so many corporations have picked the sleaziest and most aggressive persons to run their firm, instead of a more stable person who really looks for profits in the long-run. What can they expect? Is this what the Best & Brightest do these days? Finance is now about 63% of our GDP. Is this what we want? Do you want to continue this zero sum game of increasing profits off the backs of all Americans?

Jim Kawakami, June 8, 2010, http://jimboguy.blogspot.com

Vowing not to be 'chumps,' commission subpoenas Goldman's records McClatchy http://www.mcclatchydc.com/2010/06/07/95439/goldman-sachs-gets-subpoena-for.html#storylink=omni_popular 3 Minute video and transcript. WASHINGTON — Leaders of a government commission accused Goldman Sachs Monday of "stonewalling" their inquiry into causes of the financial crisis and said the panel has issued a subpoena to compel the Wall Street giant to produce documents and access to key executives. …

"In our view, this has been a very deliberate effort over time to run out the clock," Angelides said, referring to the commission's mandate to complete its sweeping examination and submit a report to Congress by December. "We're not going to let the American people be played for chumps here." …

"We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish," Angelides said, adding that Goldman has failed to provide an index so that investigators can efficiently search the data for the desired information.

"We should not be forced to play 'Where's Waldo?' on behalf of the American people," he said, an allusion to a popular picture game in which a man with a striped hat is hidden among hundreds of people.

In a summary of the subpoena, the commission said it sought information about Goldman's offshore sale of tens of billions of dollars in mortgage securities since 2004, including exotic transactions in which one party stood to profit if the underlying loans failed. It also sought the names of Goldman's customers that had earlier been identified only by numbers.

In addition, it requested a log of documents that the firm had previously turned over to investigators for the Senate Permanent Subcommittee on Investigations in response to a subpoena by that panel.

The commission's subpoena also demanded interviews with 10 present and former Goldman executives, including Chief Executive Officer Lloyd Blankfein, President Gary Cohn, Chief Financial Officer David Viniar and executives in its mortgage-trading unit. After the subpoena was served, Angelides and Thomas said, Goldman advised the panel it was ready to schedule interviews. …

On April 16, the Securities and Exchange Commission filed a civil fraud suit accusing Goldman of allowing a longtime client, the hedge fund Paulson & Co., to rig an offshore deal so that it could bet against the mostly subprime mortgage securities. Paulson reaped a $1 billion profit, while two European banks together lost about $1 billion.

The U.S. attorney's office in Brooklyn, N.Y. also is considering whether to formally open criminal investigations into the mortgage dealings of Goldman and other major banks.

In a series published last November, McClatchy reported that Goldman had sold more than $40 billion in mortgage securities backed by dicey home loans in 2006 and 2007 without telling investors that it was betting that similar securities would default

A marathon hearing in April culminating an exhaustive inquiry by the Senate Permanent Investigations Subcommittee lent credence to that report. The panel released over 100 subpoenaed documents and charged that Goldman had secretly bet billions of dollars on a housing downturn at the same time it was selling risky residential mortgage securities.


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