Will the crooks of Wall St. ever get prosecuted?

[kallend 2,027]

www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511


PS Anyone who hasn't yet watched "Inside Job" should do so.

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The only sure way to survive a canopy collision is not to have one.

[piisfish 140]

No, they will never be prosecuted.

Next question please.

scissors beat paper, paper beat rock, rock beat wingsuit - KarlM

[mnealtx 0]

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www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511


PS Anyone who hasn't yet watched "Inside Job" should do so.

$994,795 evidently buys a lot of protection from the Obama admin.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[shah269 0]

Wall Street is self regulated by our greed.
If you have a 401k or any form of modern retirement that invests then you are in a very sad way regulating the greed.
These guys are doing what they think they can get away with.
And get away not from the law but from you and I the shareholders.
We pay these guys, we give them their jobs and in effect they work for us.
As such we in theory could if we so wanted to fire these guys if we felt that they were not working with our best intentions.
Now that's theory.

Fact, you as a small time investor really have no power over these guys.

They are in fact above the laws of which you and I are held beholden to.

And why is that?
Simple, remember that 401k? If the government starts taking these guys out how bad do you think your retirement would do? And who do you think would be called upon to step in and save it?

Sad to say that the system is broken, but there is currently and most likely never will be a fix or a replacement.

But you do have a choice. You can either be the one being screwed or you could go and work for one of these large lending institutions.
I hear that they very well.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[airdvr 210]

Not until they remove the folks who orchestrated that fiasco from positions of power in DC.

Please don't dent the planet.

Destinations by Roxanne

[weekender 0]

What would they be charged with? the author says they stole money from their clients. How?


If a trader shorts a position to a client because he feels the security is going down, its not a crime. That is how market making in securities is done. It might sound criminal to a layperson but not to the parties involved. Traders do not market securities like your retail broker does. They don’t call people and say, “hey you should buy this basket of xyz”. An institutional customer says they would like to see a market in XYZ. The trader says I will buy it here and sell it here quoting the prices he choses. He reserves the option to take on a position or do the trade as an agent. Whether the security goes up or down is not his responsibility. The customer doesn’t care, they are only looking for liquidity. The customer made the decision to buy or sell and are only calling GS or another trader to broker the trade. GS doesn’t endorse the security.

You may wish it works differently but it doesn’t. Traders make a fair and equitable market, that’s it. If the customer makes or loses money on the security is their responsibility. This is not the retail world. Rules are not the same for institutions because they are expected to understand the markets.

By the way, securities traders are higher regulated contrary to what people think. For example, equity traders are finger printed and licensed at each new job. their phones are recorded and listened too. No cells are permitted on the desk. Their emails and Im’s are held for up to 7 years for review. As are the recorded phones. Anything written down on a trade blotter is also held for up to 7 years. No communication is permitted that is not monitored.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[BikerBabe 0]

No, the DoJ is too busy prosecuting people for breaking laws based on ultra-conservative morality to catch real crooks.

Never meddle in the affairs of dragons, for you are crunchy and taste good with ketchup!

[Krip 2]

Hi

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By the way, securities traders are higher regulated contrary to what people think. For example, equity traders are finger printed and licensed at each new job. their phones are recorded and listened too. No cells are permitted on the desk. Their emails and Im’s are held for up to 7 years for review. As are the recorded phones. Anything written down on a trade blotter is also held for up to 7 years. No communication is permitted that is not monitored.

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I'm sure you know who Mr Maddoff Sr is, some people may even remember watching the video of Bernie spouting the same line of BS of how highly regulated wall st is and no way can anyone beat the system, before he got caught.

I'm not a experienced investor , or work on wall st. like you are but I know the way the federal gov't works.

Care to explain to the people in this forum about the duty of the "compliance officer" employed by the firms on wall st.

Does Goldman Slacks have one of those? Who pays his salary?

Then explain to us how Enron got away with their BS at the expense of the widows and orphans in Cal, and their lower level employee's.

Have a nice day

One Jump Wonder

[weekender 0]

Bernie Madoff was not an employee at GS. He was a thief, plain and simple and is in jail for it. He really doesn’t have anything to do with my point though.

A compliance officer is employed by a broker dealer to insure the firm does not operate outside of industry rules and gov’t laws. They are held personally responsible for violations of the people they supervise. Similar to internal affairs on a police dept they can be hated. They work to protect the firm from rouge traders and such. They do not care if you need to make a living, only that you adhere to the rules. Crimes of fraud are very bad for business and compliance officers attempt to protect the firm from its own employee’s.

GS has a very large compliance department. As does all investment banks. As mentioned above they are employed by the firm.

Enron has nothing to do with GS but ill answer your question anyway. Enron didn’t get away with it. The firm went bankrupt. People went to jail. Employees who were innocent lost their livelihood, life savings and retirements. Don't understand what they got away with. it was a huge fail, all around.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[weekender 0]

to be clear. My point is that while no one might like what GS did, it might not be a crime. I'm speaking specifically in reference to the mortgage-backed securities trading. Its not a crime to sell a security you believe is going lower.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[shah269 0]

The issue at hand is such;
1) There is a strong appearance of impropriety.
Sometimes it's not about if you were innocent or guilty rather the appearance that you were.

2) The system as it stands now is broken. No system can regulate itself. The checks and balances are always external. Be it in legal terms or biology. Those checks and balances were removed in the name of higher profits via greater efficiency and greater accessibility to lending power for the lower class.

3) John Q Public is in a catch 22. They currently have little love nor respect for those that work for or are in high power positions at large lending and investment institutions. But there isn't much that can be cone since a vast majority of the nations retirement plans "ride the markets".

4) The lending and investment institutions are in a very serious bind. They as noted in #3 are the main source of a vast majority of the nations soon to be retired citizens with little to no real income coming in from those who are working due to ever increasing inflation and reduced savings rates. As such the institutions have a large outstanding obligation which they have to meet and a finite method to do so. As such they are more prone to taking huge financial risks.

5) The elected officials receive a good bit of their backing from the larger banks. But they also have to answer to the public. The sad truth is a vast number of our citizens do not vote but almost all large institutions "invest" in political figures.

So where does that leave us?
We are nothing more than a collection of parts, remains of an explosion that took place decades ago when the middle class died, the poor became destitute and the top 1% procured a vast portion of the nation's wealth.

The days of a JFK calling all the heads of the big manufactures into his office to scream at them for price fixing and to get their asses in gear are long gone.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[weekender 0]

shah269 wrote"2) The system as it stands now is broken. No system can regulate itself. The checks and balances are always external. Be it in legal terms or biology. Those checks and balances were removed in the name of higher profits via greater efficiency and greater accessibility to lending power for the lower class."

Just one point in reference to your #2. Self regulatory organization(SRO's) are in ADDITION to the gov't. they do not replace it. You must adhere to the laws of the state AND the NYSE and FINRA. Not one or the other.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[kelpdiver 2]

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By the way, securities traders are higher regulated contrary to what people think. For example, equity traders are finger printed and licensed at each new job. their phones are recorded and listened too. No cells are permitted on the desk. Their emails and Im’s are held for up to 7 years for review. As are the recorded phones. Anything written down on a trade blotter is also held for up to 7 years. No communication is permitted that is not monitored.

In addition to what he already wrote - most employees at securities firms are severely limited in their trading activity. In order to prevent the impression that the insiders are cheating their customers, they have limitations on purchases (if the firm is doing it as well, they're blocked out until it's over), on sales (I have a 60 day min holding period), and on the nature of the items (IPOs are generally no go). In addition, political contributions also have to be precleared, and have a much lower limit.

The Rolling Stone has been printing a number of these, but the last one I read (perhaps 2 months ago) was long winded yet light on actual crimes that could be prosecuted.

"I'm mad as hell" isn't really enough for an indictment, but apparently the readership of that magazine doesn't know any better.

[shah269 0]

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shah269 wrote"2) The system as it stands now is broken. No system can regulate itself. The checks and balances are always external. Be it in legal terms or biology. Those checks and balances were removed in the name of higher profits via greater efficiency and greater accessibility to lending power for the lower class."

Just one point in reference to your #2. Self regulatory organization(SRO's) are in ADDITION to the gov't. they do not replace it. You must adhere to the laws of the state AND the NYSE and FINRA. Not one or the other.

Yes but you have to admit current regulations are a bit lax compared to what they once were.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[kallend 2,027]

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to be clear. My point is that while no one might like what GS did, it might not be a crime. I'm speaking specifically in reference to the mortgage-backed securities trading. Its not a crime to sell a security you believe is going lower.

Not just a matter of belief, they actively bet against the securities they were pushing on their investors, aided and abetted by AAA ratings from Moodys, S&P, etc., who then had the gall to say that their ratings were protected by their 1st Amendment rights. Their execs then took huge bonuses even after the taxpayers had bailed them out.

Then GWB appointed G&S head crookCEO to be his Secretary of the Treasury, thereby enabling the bastard to avoid $50M in taxes.

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The only sure way to survive a canopy collision is not to have one.

[kallend 2,027]

Quote

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shah269 wrote"2) The system as it stands now is broken. No system can regulate itself. The checks and balances are always external. Be it in legal terms or biology. Those checks and balances were removed in the name of higher profits via greater efficiency and greater accessibility to lending power for the lower class."

Just one point in reference to your #2. Self regulatory organization(SRO's) are in ADDITION to the gov't. they do not replace it. You must adhere to the laws of the state AND the NYSE and FINRA. Not one or the other.

Yes but you have to admit current regulations are a bit lax compared to what they once were.

That's because the federal government (and particularly the financial regulatory parts) are bought and paid for by the industry. And that includes BOTH Republicans and Democrats.

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The only sure way to survive a canopy collision is not to have one.

[kelpdiver 2]

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Yes but you have to admit current regulations are a bit lax compared to what they once were.

do you have an example in mind, or are you just making shit up again?

Enron/Worldcom/etc lead to Sarbanes-Oxley in 2002, a crapload of onerous regulation that did absolutely nothing to prevent 2008. That's been followed up with yet more legislation without a purpose. When is this era you speak of where it was strict (and presumably effective?)

[weekender 0]

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to be clear. My point is that while no one might like what GS did, it might not be a crime. I'm speaking specifically in reference to the mortgage-backed securities trading. Its not a crime to sell a security you believe is going lower.

Not just a matter of belief, they actively bet against the securities they were pushing on their investors, aided and abetted by AAA ratings from Moodys, S&P, etc., who then had the gall to say that their ratings were protected by their 1st Amendment rights. Their execs then took huge bonuses even after the taxpayers had bailed them out.

Then GWB appointed G&S head crookCEO to be his Secretary of the Treasury, thereby enabling the bastard to avoid $50M in taxes.

Marketing and selling are not the same thing. You can make a sale in a security without ever marketing it. for example… a customer calls and says they would like you to put together a security that contains mortgages you believe are solid. It must have a high rating from a recognized agency and they are willing to pay X. You do just that and offer it to him at X. They go to zero because the rating agency was wrong and so was the banks belief that the mortgages were solid. The customer loses his ass. You did “sell” the security but you did not “push” it. In other words you made a sale but did not market the security. No crime on your part because the institutional investor is held to a higher standard by the laws. He is expected to know what he is purchasing. Unless he can prove fraud, no crime.

you might not like it but thats how it works. sorry

"The point is, I'm weird, but I never felt weird."
John Frusciante

[kallend 2,027]

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Yes but you have to admit current regulations are a bit lax compared to what they once were.

do you have an example in mind, or are you just making shit up again?

Enron/Worldcom/etc lead to Sarbanes-Oxley in 2002, a crapload of onerous regulation that did absolutely nothing to prevent 2008. That's been followed up with yet more legislation without a purpose. When is this era you speak of where it was strict (and presumably effective?)

Glass-Steagall was repealed in 1999. I find it hard to believe that the 2008 meltdown would have occurred if Glass-Steagall was still in place.

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The only sure way to survive a canopy collision is not to have one.

[kallend 2,027]

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to be clear. My point is that while no one might like what GS did, it might not be a crime. I'm speaking specifically in reference to the mortgage-backed securities trading. Its not a crime to sell a security you believe is going lower.

Not just a matter of belief, they actively bet against the securities they were pushing on their investors, aided and abetted by AAA ratings from Moodys, S&P, etc., who then had the gall to say that their ratings were protected by their 1st Amendment rights. Their execs then took huge bonuses even after the taxpayers had bailed them out.

Then GWB appointed G&S head crookCEO to be his Secretary of the Treasury, thereby enabling the bastard to avoid $50M in taxes.

Marketing and selling are not the same thing. You can make a sale in a security without ever marketing it. for example… a customer calls and says they would like you to put together a security that contains mortgages you believe are solid. It must have a high rating from a recognized agency and they are willing to pay X. You do just that and offer it to him at X. They go to zero because the rating agency was wrong and so was the banks belief that the mortgages were solid. The customer loses his ass. You did “sell” the security but you did not “push” it. In other words you made a sale but did not market the security. No crime on your part because the institutional investor is held to a higher standard by the laws. He is expected to know what he is purchasing. Unless he can prove fraud, no crime.

you might not like it but thats how it works. sorry

If the banks had "belief that the mortgages were solid" why did they bet against them?

Nice of you to make excuses for inexcusable. Do you work in financial services?

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The only sure way to survive a canopy collision is not to have one.

[weekender 0]

[Amazon 7]

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No, the DoJ is too busy prosecuting people for breaking laws based on ultra-conservative morality to catch real crooks.

+1

Anyone with half a brain knows that ZIP will be done to those who REALLLLLY run this country.

[weekender 0]

"If the banks had "belief that the mortgages were solid" why did they bet against them?"

The trader might not have the same opinion as the bank he works for. for example...a bank has a rating of buy on xyz security. the trader feels its going lower. he can short the security and make money. no foul.

you dont like it but thats how it works. im not making excuses for anything. i am explaining to you how it works and why it might not be a crime. you dont have to like what i say but it doesnt make me wrong.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[kelpdiver 2]

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Glass-Steagall was repealed in 1999. I find it hard to believe that the 2008 meltdown would have occurred if Glass-Steagall was still in place.

A fair example to discuss:

The repeal of provisions of the Glass-Steagall Act of 1933 by the Gramm-Leach-Bliley Act effectively removed the separation that previously existed between Wall Street investment banks and depository banks. This repeal directly contributed to the severity of the Financial crisis of 2007–2010.[4][5][6][7][8] Others argue that repealing the provisions had little impact on the financial system and even helped restore stability during the financial crisis.

[DrewEckhardt 0]

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Simple, remember that 401k? If the government starts taking these guys out how bad do you think your retirement would do?

All else equal it should do as well as it would have done before the financial industry comprised its current 8% share (holding 4% through the 1970s) of the GDP which is to say that as a middle class guy saving for retirement I'd have a few million in current dollars set aside by the time I got to 65 and living a more lavish lifestyle than I did while working.

Obviously some things will put a damper on that like medical costs increasing radically faster than inflation and reform aimed at maximizing health care industry profits instead of lowering costs for consumers .