SEC Gives Vampire Squid Heartburn
A highly publicized lawsuit has been filed by the SEC against the Vampire Squid er, Goldman Sachs. From Zero Hedge:
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. The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.
I like this – “[…]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.” – gee, do you think? What is going to come of all this; that is to say, will there be heads on pike, decorated street lamps on Wall Street or fried bankster? Doubtful, but the proles* might be a bit less restive for a bit whilst they savor the thought of some high-flying muckety-muck going down hard for the abstract financial shenanigans that helped the US economy auger in. That’s the MSM soap opera angle.
The fat lady isn’t singing yet for the big boys, but I have a hunch that some serious fines are likely to be involved – serious enough to get some the high-finance rollers attention and adroitly played by the administration to not offend the big campaign contributors in an election year. After all, it’s not like the federal government doesn’t need the money.
The news of this sucker is all all over the place. In addition to the Zero Hedge link:
- Global Guerrillas (WHAT?!? You’re not reading John Robb?)
- The Big Picture – ‘Its not much of a stretch to suggest that Abacus 2007 was Goldman Sachs’ “Springtime for Hitler.”’
- Cryptogon – Is it me or does this picture look like Hank is giving instructions on how to – well, look for yourself. It ain’t the “Time Warp”.
- David Goldman (Asia Times Online) – “Pandora’s Box is Open and Woe to the Financials – ‘racy'”
Seriously though, just one old school French-style head roll in slo-mo. Is that too much to ask?