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If a client comes to you and says "I want to buy some bank stocks", and you help them make that happen, what exactly did you do wrong? There's plenty of proble

If a client comes to you and says "I want to buy some bank stocks", and you help them make that happen, what exactly did you do wrong? There's plenty of problems in finance, but you won't be helping fix any of them by identifying even normal transactions as somehow fraudulent.

makapuf 10y ago
It depends on what you did by helping them. The article did not specifically underline the straightforward way of the deal. Or (God forbid) morality. For any measure of morality (well perhaps not a dictator one)
- smallnamespace 10y ago
  The article was pretty specific: * The client came up with the trade idea (the spark seems to have come from Qaddafi himself.) * It was basically just a call option, not some complicated thing with many bells and whistles * The clients aren't even claiming they were duped in any way The problem is not that Kabbaj was lying. It's that he was too charming.
  - claudius 10y ago
    > The problem is not that Kabbaj was lying. It's that he was too charming. Elsewhere, this sort of thing would be called corruption, specifically bribery of a public employee.
    - notahacker 10y ago
      Yeah. I've no sympathy whatsoever for the Libyan officials[1]. They made a bad bet and lost money. It wasn't a bet that was purposely designed to lose, and was apparently actually less risky than the conventional stock purchase.[2] Their claim not to have known what they were doing makes them more culpable, not less, for anything that went wrong because they were supposed to be looking after a sovereign wealth fund FFS. That doesn't mean that internships-for-deals or prostitutes-for-deals is an appropriate thing for a bank employee to be offering. [1]the picture is somewhat complicated by the legitimate beneficiaries - the Libyan people - having had very little say in who ran their sovereign wealth fund, and the Libyan regime having radically changed since 2007 [2]not only was it less damaging than the equivalent long position in stock would have been with the benefit of hindsight, but other articles suggest the Libyans preferred the derivative option because they were less likely to be subject to asset freezes/seizures if the US government took a more anti-Gaddafi stance in future...
makomk 10y ago
Goldman didn't help them make that happen. They sold them highly leveraged bets that the bank stocks would go up, not bank stocks. The two are very different things.

makapuf 10y ago

It depends on what you did by helping them. The article did not specifically underline the straightforward way of the deal. Or (God forbid) morality. For any measure of morality (well perhaps not a dictator one)

smallnamespace 10y ago
The article was pretty specific: * The client came up with the trade idea (the spark seems to have come from Qaddafi himself.) * It was basically just a call option, not some complicated thing with many bells and whistles * The clients aren't even claiming they were duped in any way The problem is not that Kabbaj was lying. It's that he was too charming.
- claudius 10y ago
  > The problem is not that Kabbaj was lying. It's that he was too charming. Elsewhere, this sort of thing would be called corruption, specifically bribery of a public employee.
  - notahacker 10y ago
    Yeah. I've no sympathy whatsoever for the Libyan officials[1]. They made a bad bet and lost money. It wasn't a bet that was purposely designed to lose, and was apparently actually less risky than the conventional stock purchase.[2] Their claim not to have known what they were doing makes them more culpable, not less, for anything that went wrong because they were supposed to be looking after a sovereign wealth fund FFS. That doesn't mean that internships-for-deals or prostitutes-for-deals is an appropriate thing for a bank employee to be offering. [1]the picture is somewhat complicated by the legitimate beneficiaries - the Libyan people - having had very little say in who ran their sovereign wealth fund, and the Libyan regime having radically changed since 2007 [2]not only was it less damaging than the equivalent long position in stock would have been with the benefit of hindsight, but other articles suggest the Libyans preferred the derivative option because they were less likely to be subject to asset freezes/seizures if the US government took a more anti-Gaddafi stance in future...

makomk 10y ago

Goldman didn't help them make that happen. They sold them highly leveraged bets that the bank stocks would go up, not bank stocks. The two are very different things.