Tag Archives: broker fraud

Is there Justice for Goldman Sachs?

Do you remember that 11-hour Senate hearing where there were more scatological references than you could find in a Beavis and Butthead movie? “How much of that sh**ty deal did you sell?” asked Senator Carl Levin, the Michigan Democrat who was running a hearing of the Senate Permanent Subcommittee on investigations. “Should Goldman Sachs be trying to sell the sh**ty deal?

Levin was grilling a Goldman executive about the over-the-top emails Levin’s committee had collected that made very clear that insiders at Goldman — and other firms — were privately trashing the same securities they were selling to their customers. One gem the investigators had come across: A Goldman executive emailing a colleague “Boy that Timberwolf was one sh**ty deal.”

When all was said and done, Levin asked the Justice Department to look into whether Goldman had broken the law by misleading clients. Last Thursday, Justice said it wouldn’t be bringing a case.

In my column for CNN.com today, I raise the question that’s on a lot of people’s minds: Do big banks like Goldman get special treatment? Read article

No Big Boy Pants for Banks That Whine Over Rules

Are you tired of it yet? “We are all for financial reform,” the Wall Street story goes. “But we can’t have regulations that make us anti-competitive.”

Another financial crisis like the last one and you have to wonder who we’d be worrying about competing against. Whatever. The financial industry is very busy trying to make the case that before we can make new rules, we have to prove that the benefits outweigh the costs. I write about it in my latest column for Bloomberg View:

To get an idea of who has the upper hand in this fight, consider what it entails to be the chump who has to explain the “benefits” side of financial regulation. Costs can be easy to figure out. But how do you put a dollar figure on credit markets that don’t collapse? Or the elderly who don’t lose their life savings because regulators have cracked down on rip-off artists who troll retirement villages?

The object of the exercise is to swamp regulators with work and make rule-making impossible. The strategy is working. Read article.

 

$200 Million of Customers’ $ Went Missing, But Iowa Sure Loved PFGBest

You can count on “the absolute dedication” of our company to protect your money. That’s what a futures trading firm in Iowa, PFG Best, said to customers just after MF Global filed for bankruptcy last Fall. Fast forward to July 11. PFG itself was filing for bankruptcy after $200 million of its customers’ money had disappeared.

PFG Best is the latest example of a lot of things that              are wrong with the financial industry and the people who purport to police it.

Its CEO, who said in a suicide note earlier this month (the suicide attempt failed) that he’d been stealing from customers for 20 years, sat on an advisory committee of one of his company’s regulators. In fact, the board of directors of the National Futures Association voted three times to put Russell Wasendorf, Sr. on the committee it consulted with about possible new regulations.

And then there are all the awards that Wasendorf got for his charity and civic-mindedness. Do keep that in mind next time you’re wowed by some business big-shot whose generosity is fueling a few too many press releases. I wrote about the PFG debacle in a column for Dealbreaker.com today. Read article.

Scandal? What scandal?

Lloyd Blankfein, CEO of Goldman Sachs Group Inc., wrote an op-ed today for Politico.com. He talks about the challenges facing America and offers some solutions that might make America a more attractive place to invest.

He managed to carry on for 975 words without addressing the impact of his industry’s reckless behavior on investor confidence. Read article

Kids Cheat Just Like Their Role Models in Business Do

Your kids are cheating at school? Well, what did you expect?

New York City officials said this week that 70 students at one of its most prestigious high schools had been involved in a cheating scheme. In the ensuing press coverage, much was made of the stressful demands on Stuyvesant teenagers to meet expectations in a school that sends graduates to places like MIT and Brown.

“Most of the students come from families where the goal is ‘Ivy League school or bust’; you either go to an Ivy League school or you haven’t lived up to your potential,” one Stuyvesant grad told the New York Times.

My column in The Huffington Post today takes a look at kids, cheating, and the bad role models in business that kids can’t help but notice. Read article