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If you think that Goldman hasn't done their homework, and consulted with their very close buddies at the SEC, then you're crazy. These guys have proven over th

If you think that Goldman hasn't done their homework, and consulted with their very close buddies at the SEC, then you're crazy. These guys have proven over the past several years in particular that they are the gods of finance, and if there are rules and regulations in their way, they will either find a path around them or convince government officials to craft a new hole instead.

MichaelApproved 16y ago
Didn't they just recently get busted by the SEC and were not able to find a path around the rules and fines?
- mebassett 16y ago
  perhaps they did. but perhaps you should provide some more information about the event you refer to. This perhaps? http://www.bloomberg.com/news/2010-12-10/goldman-executive-fabrice-tourre-files-motion-to-dismiss-amended-sec-suit.html http://www.bloomberg.com/news/2010-12-10/goldman-executive-f...
  - brown9-2 16y ago
    MichaelApproved is referring to this http://www.bloomberg.com/news/2010-07-20/goldman-sachs-settlement-with-sec-for-550-million-approved-by-u-s-judge.html http://www.bloomberg.com/news/2010-07-20/goldman-sachs-settl... The U.S. Securities and Exchange Commission won court approval to levy a $550 million penalty against Goldman Sachs Group Inc., the largest ever against a Wall Street firm, over claims the bank misled investors in collateralized debt obligations linked to subprime mortgages.
    - MichaelApproved 16y ago
      Thanks for the reference. I was on my phone, thought it was known well enough and so I didn't give more details. Will try to give more details next time.
- lefstathiou 16y ago
  $550 million sounds like a big number but it represents less than 6 days of trading profits to Goldman. It was a drop in the proverbial bucket. http://seekingalpha.com/article/135785-goldman-sachs-why-aren-t-trading-profits-raising-any-red-flags http://seekingalpha.com/article/135785-goldman-sachs-why-are...
  - yummyfajitas 16y ago
    Reporting it as a fraction of trading profits is a confusing thing to report. After all, Goldman has lots of non-trading costs: buildings, salaries, software licenses, vendor payments, etc. It was actually 15.5 days of profits for Goldman, plus the $90 million Goldman lost on the deal itself. (Goldman wasn't just a perpetrator, they were also one of the victims. If you believe the SEC, Goldman helped Paulson to defraud themselves as well as others.)
    - phlux 16y ago
      >If you believe the SEC, Goldman helped Paulson to defraud themselves as well as others. CYA
swombat 16y ago
While I don't believe GS is immune to errors, I don't think it's that unlikely that they might have foreseen this. It's such an ugly hack that they couldn't have expected it to go unnoticed, especially since it seems to me they (directly or indirectly) were the ones to tell the press about it. It feels like the Media/SEC reaction is, so far, playing by the book, utterly predictable. So the real question is, did they let Facebook know this was going to happen? If yes, then perhaps this is a media coup to frienzy up interest into the soon-to-come IPO. Perhaps they'll cancel the whole deal now, but the $50b valuation will remain in people's heads as a "good deal" that "high net worth individuals" were willing to invest at. This might help drive a traditional IPO price upwards. If no, then perhaps this is GS's attempt to force Facebook to IPO, so they can make a few billions along the way. It's always nice to have a billion or two extra on the balance sheet, even when you're GS. Then again, it's not good business practice to screw over your clients, and somehow I don't think that's what happened. In either case, I think the SEC should look long and hard at its rule book and see if there is any way it can bar GS from being the senior lead in the IPO. Oh wait, the SEC is made of former GS employees. Nevermind.

MichaelApproved 16y ago

Didn't they just recently get busted by the SEC and were not able to find a path around the rules and fines?

mebassett 16y ago
perhaps they did. but perhaps you should provide some more information about the event you refer to. This perhaps? http://www.bloomberg.com/news/2010-12-10/goldman-executive-fabrice-tourre-files-motion-to-dismiss-amended-sec-suit.html http://www.bloomberg.com/news/2010-12-10/goldman-executive-f...
- brown9-2 16y ago
  MichaelApproved is referring to this http://www.bloomberg.com/news/2010-07-20/goldman-sachs-settlement-with-sec-for-550-million-approved-by-u-s-judge.html http://www.bloomberg.com/news/2010-07-20/goldman-sachs-settl... The U.S. Securities and Exchange Commission won court approval to levy a $550 million penalty against Goldman Sachs Group Inc., the largest ever against a Wall Street firm, over claims the bank misled investors in collateralized debt obligations linked to subprime mortgages.
  - MichaelApproved 16y ago
    Thanks for the reference. I was on my phone, thought it was known well enough and so I didn't give more details. Will try to give more details next time.
lefstathiou 16y ago
$550 million sounds like a big number but it represents less than 6 days of trading profits to Goldman. It was a drop in the proverbial bucket. http://seekingalpha.com/article/135785-goldman-sachs-why-aren-t-trading-profits-raising-any-red-flags http://seekingalpha.com/article/135785-goldman-sachs-why-are...
- yummyfajitas 16y ago
  Reporting it as a fraction of trading profits is a confusing thing to report. After all, Goldman has lots of non-trading costs: buildings, salaries, software licenses, vendor payments, etc. It was actually 15.5 days of profits for Goldman, plus the $90 million Goldman lost on the deal itself. (Goldman wasn't just a perpetrator, they were also one of the victims. If you believe the SEC, Goldman helped Paulson to defraud themselves as well as others.)
  - phlux 16y ago
    >If you believe the SEC, Goldman helped Paulson to defraud themselves as well as others. CYA

swombat 16y ago

While I don't believe GS is immune to errors, I don't think it's that unlikely that they might have foreseen this. It's such an ugly hack that they couldn't have expected it to go unnoticed, especially since it seems to me they (directly or indirectly) were the ones to tell the press about it. It feels like the Media/SEC reaction is, so far, playing by the book, utterly predictable. So the real question is, did they let Facebook know this was going to happen? If yes, then perhaps this is a media coup to frienzy up interest into the soon-to-come IPO. Perhaps they'll cancel the whole deal now, but the $50b valuation will remain in people's heads as a "good deal" that "high net worth individuals" were willing to invest at. This might help drive a traditional IPO price upwards. If no, then perhaps this is GS's attempt to force Facebook to IPO, so they can make a few billions along the way. It's always nice to have a billion or two extra on the balance sheet, even when you're GS. Then again, it's not good business practice to screw over your clients, and somehow I don't think that's what happened. In either case, I think the SEC should look long and hard at its rule book and see if there is any way it can bar GS from being the senior lead in the IPO. Oh wait, the SEC is made of former GS employees. Nevermind.