ERIC HOLDER IS A CORPORATE LAWYER AND OBAMA DECIDES HIS TENURE. THE WALL STREET CROWD HAD THIS PLANNED TO THE DETAIL AND THE PUBLIC WOULD HAVE GOTTEN AN ERIC HOLDER WHETHER CLINTON OR McCAIN HAD WON THE ELECTION. WHAT IS CLEAR IS THAT ANY DECISION NOT TO PROSECUTE DOES NOT MEAN THAT SOMEONE ELSE WILL NOT FOLLOW THROUGH WITH INVESTIGATIONS AND PROSECUTIONS.
THIS 'COMPLEX FINANCIAL INSTRUMENT'....ABACUS.....IS TYPICAL OF THE DEALS THAT BROUGHT THE ECONOMY DOWN. WHAT WE ARE HEARING NOW THAT THE JUSTICE DEPARTMENT IS FAILING TO PROSECUTE IS THAT THESE DEALS ARE LEGITIMATE AND WILL BE USED AS FINANCIAL MODELS IN THE FUTURE. IT IS A GREEN LIGHT.
AS I SAID IN YESTERDAY'S BLOG, IT IS OUR LOCAL AND STATE ELECTED OFFICIALS THAT ARE SILENT ON THESE JUSTICE INJUSTICES......ON THE FAILURE TO ENACT AND ENFORCE LAWS STILL OCCURRING THAT SET THE STAGE FOR MORE OF THE SAME. THE MIDDLE-CLASS CANNOT SURVIVE THIS KIND OF ECONOMY AND THE POOR WILL BE DEVASTATED BY MORE OF THE SAME.
WE MAY NOT BE ABLE TO VOTE OBAMA OUT, AS THE CHOICE IS WORSE, BUT WE MUST VOTE THESE LOCAL AND STATE OFFICIALS OUT OF OFFICE....THEY ARE SETTING THE STAGE FOR THIS CRIMINALITY BY NOT LEGISLATING AND BY NOT ENFORCING EXISTING LAWS.
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!!
HE OR SHE IS AS RESPONSIBLE FOR THESE INJUSTICES AS ARE OBAMA AND ERIC HOLDER. I JUST WANTED TO REVISIT THIS ONE CASE IN DETAIL AS AN EXAMPLE. IN 2010 THE PUBLIC EXPECTED THAT WE WOULD SEE JUSTICE......IN 2011 WE WERE WORRIED THAT IT HADN'T COME.....AND IN 2012 WE SEE CONFIRMATION OF COLLUSION AND CONSPIRACY AT TOP LEVELS OF THE US GOVERNMENT.
SARBANES, CARDIN, AND CUMMINGS ARE ALL ON THE BALLOT IN NOVEMBER........WE WANT WRITE-IN CANDIDATES TO WIN THESE ELECTIONS!!!!
Gold case breathes life back into the blame game: The fallout from the Abacus affair could see Lloyd Blankfein humbled and US banks brought dramatically to hell by determined regulators,
write James Quinn and Helia Ebrahimi
Wall Street Journal International
The impact on clients to date does not appear to have been substantial, with much of the back-biting coming from Main Street rather than Wall Street. "The SEC investigation into Goldman Sachs... will turn the American public even more strongly toward holding Wall Street accountable for the financial disaster," argues Heather Booth, director of Americans for Financial Reform, a US pressure group.
"These are big names and big reputations at stake. Anyone who structures a product and sells to a third party and then bets against the underlying asset looks fraudulent," said a New York-based hedge fund manager with one of the US's largest hedge funds.
Although the charges are currently only civil ones - which is all the SEC is restricted to do - there is speculation about whether the Department of Justice may yet bring its own case.
IT IS IMPORTANT TO REMEMBER THAT THE SEC PROTECTS THE BIG INVESTORS AND WALL STREET.....NOT MAIN STREET, SO THE PUBLIC LOOKS TO THE JUSTICE DEPARTMENT FOR RECOURSE. THE FAILURE OF THE GOVERNMENT TO PROTECT AND SERVE MEANS PRIVATE LAW FIRMS ARE THE NEXT RECOURSE, BUT AS WE HAVE SEEN EARLIER, THEY ARE NOT PROVING TO BE LEADING CLASS ACTION LAWSUITS BECAUSE MUCH OF THE EVIDENCE THEY NEED IT SEQUESTERED BY THE JUSTICE DEPARTMENT.
THE COMPLEXITY OF THIS MASSIVE FRAUD IS AS MIND-BOGGLING AS THE AMOUNT OF MONEY IT MOVED.......THE LARGEST TRANSFER OF MONEY BY FRAUD IN HUMAN HISTORY. IF YOU ARE NOT SHOUTING LOUDLY FOR NEW LAWS AND ENFORCEMENT OF EXISTING LAWS, YOU ARE LEAVING YOUR CHILDREN AND GRANDCHILDREN WITH THIS CRIMINAL ECONOMY!
MAKE ACTIVISM YOUR NEW BEST HOBBY AND VOTE YOUR INCUMBENT OUT!!!!!
FAST-FORWARD TO TODAY. NO ONE IS SURPRISED BY THIS ANNOUNCEMENT. THE FACT THAT WE HAVE HAD NO ARRESTS AND PROSECUTIONS FOR THREE YEARS INDICATES A COVERUP. THIS DEAL WAS SO BLATANTLY OBVIOUS.....NPR's 'THIS AMERICAN LIFE' DEDICATED AN ENTIRE PROGRAM ON STEP BY STEP EVIDENCE OF COLLUSION AND FRAUD.....THAT WE KNOW NOW THAT NONE OF THESE FRAUDS WILL BE PROSECUTED.
Justice Department will not prosecute Goldman Sachs, employees for Abacus deal
Credit: Reuters/Brendan McDermid
WASHINGTON | Thu Aug 9, 2012 7:34pm EDT
WASHINGTON (Reuters) - Neither Goldman Sachs Group Inc nor its employees will face U.S. criminal charges related to trades they made during the financial crisis that were highlighted in a 2011 U.S. Senate report, the Justice Department said on Thursday.
The unusual announcement not to prosecute criminally came in an unsigned statement attributed to the department.
Few expected the bank to face criminal charges, but in April 2011, U.S. Senator Carl Levin asked for a criminal investigation after the subcommittee he leads spent years looking into Goldman.
Levin's subcommittee held televised hearings as part of its inquiry, which centered on a subprime mortgage product known as Abacus. He said Goldman misled Congress and investors.
Goldman employee Fabrice Tourre still faces a civil complaint from the U.S. Securities and Exchange Commission. He has denied any wrongdoing and was the only person accused.
Goldman itself settled with the SEC for $550 million in July 2010 without admitting wrongdoing.
The statement from the Justice Department said that officials there "have determined that, based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report" from Levin's subcommittee.
Justice Department investigators and prosecutors worked on their inquiry for "more than a year," the statement said.
Those working on the inquiry included officials in the department's Criminal Division and in the U.S. Attorney's Office in Manhattan, the statement said.
They "ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the statement continued.
"If any additional or new evidence emerges, today's assessment does not prevent the department from reviewing such evidence and making a different determination, if warranted," the statement said.
HISTORY WILL INDEED READ THIS DIFFERENTLY. THE CURRENT POLITICAL PLAYER COULD CARE LESS; THEY WILL BE MADE EXTREMELY WEALTHY WITH OFF-SHORE ACCOUNTS FILLING WITH WALL STREET GRATITUDE.
News analysis ; A win for Goldman, but history could yet see it differently, says John Gapper Financial Times London
The stock market had little doubt yesterday as to which entity had come off best in the tussle between Goldman Sachs and the Securities and Exchange Commission.
As news emerged that the bank would be fined only half of the expected $1bn and none of its senior executives would fall on his sword, the investment bank's shares rose sharply.
The history books are likely, however, to take a different view. The affair has certainly turned out better than it might have done for Goldman, but its image of unruffled superiority on Wall Street has been tarnished since regulators shocked investors in April by bringing fraud charges over the Abacus structured finance deal.
Lloyd Blankfein, Goldman's chairman and chief executive, and Gary Cohn, its chief operating officer, now head an investment bank that looks more vulnerable than at any time since 1994, when it was riven by divisions among partners amid bond market turmoil. It is possible, even likely, that a shake-up at the top will follow this year.
Mr Blankfein will be pleased that Goldman managed to stand its ground against the SEC on the issue of fraud.
Even more significant to Goldman than the size of the fine was its determination not to admit to intentional fraud, which was the SEC's most serious charge over Abacus - nor even to reach a "neither admit nor deny" settlement on that charge.
It prevailed on this point, settling only on charges that it breached securities law by not disclosing to investors the role of Paulson & Co, the hedge fund, in choosing the mortgage securities that went into the Abacus deal. That not only sounds better, but reduces Goldman's potential civil liability over Abacus and other deals.
Apart from paying the fine and compensation, Goldman has agreed to tighten up the way it markets such deals, which will not cause it too much pain. Were it not for the broader effect of the affair on its credibility, it would have escaped lightly.
The past four months, however, have inflicted considerable pain on Goldman, from which it is still fighting to recover. Probably the worst event was the hearing in Washington at which traders and executives involved in Abacus - including Fabrice Tourre, who still faces SEC charges - gave evidence.
It will take a long time for memories to fade of the defensive, uncomfortable attitude of its junior employees - quite unlike the low-key, considered image the bank likes to project. They denied wrongdoing, but did not sound as if they had been doing, in JPMorgan's famous phrase, "first-class business in a first-class way."
Just as importantly for the bank's leadership, the Abacus settlement throws a harsh light on the direction in which Goldman has evolved since its 1999 initial public offering. Both Mr Blankfein and Mr Cohn hail from the trading side of the bank and have adopted a more aggressive, and profitable, approach to business.
Even before Abacus, Goldman faced questions about whether it was treating clients as well as in the past or was putting its own interests first.
Goldman won the day yesterday by avoiding the word "fraud" and by being fined less than some people had expected, but the long-term toll remains profound.
Robert Khuzami, director of the SEC's enforcement division said the settlement was "a stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing."
Credit: By John Gapper
(Copyright Financial Times Ltd. 2010. All rights reserved.)
Unravelling collateralised debt deal: How Abacus added up . Evening Standard [London (UK)] 22 Apr 2010: 43.
THIS chart, obtained by the Evening Standard, highlights the complexity of financial markets at the height of the toxic debt boom.
It shows the planned structure of Abacus, the synthetic collateralised debt obligation that made Paulson & Co almost $1 billion (Pounds 649.2 million) profit and ended with fraud charges being launched against Goldman Sachs. It is from a 66-page PowerPoint presentation made to hundreds of institutional investors in London, New York and Tokyo, and illustrates the complicated deals which were being offered to investors in the heady days of early 2007.
To simplify matters, Paulson (Protection Buyer in the diagram) asked Goldman to find a way it could bet on US house prices falling. Goldman created Abacus, a synthetic CDO, which held no actual mortgages or even real CDOs but mirrored a portfolio of some 90 CDOs selected jointly by Paulson and ACA Capital.
On the other side of the equation were the "investors" which turned out to be just ACA, German bank IKB and Goldman itself. They bought various types of notes attached to Abacus giving them different levels of risk and reward.
On the edges of Abacus were other devices designed to reduce risk. These included an interest rate hedge supplied by Goldman (Basis Swap) and the "Collateral Put Provider" arranged by Goldman in London whereby ABN Amro, now owned by RBS, insured $909 million of the capital risk.
Copyright (c) Associated Newspapers Ltd. 2010
I JUST WANT TO SHOW HOW THIS FAILURE IN JUSTICE EXTENDS TO ALL CORPORATE FRAUD AND THE MOVES THESE POLITICIANS ARE MAKING ARE WINDOW DRESSING AS THE FUNDAMENTALS TO HOLDING THESE ENTITIES ACCOUNTABLE ARE LEFT UNADDRESSED.
Below you will see a report that shows Medicare alone accounts for an estimated $60-80 billion in losses a year. Medicaid is thought to account for that amount and more. So you are looking at $200 billion in losses to entitlements each year.
The Federal Government's attempt to increase enforcement is welcomed, but we see that the basic groundwork has not been laid so seriousness is questionable. Congress and state legislatures have deliberately left fraud laws absent or vague to prevent enforcement as we are seeing with financial fraud so goes it with health fraud. Secondly, Congress has defunded the Justice Department's white collar crime agencies just as this fraud is exploding. We know that fraud units are self-sustaining but we hear the excuse of funding for the lack of investigations at all level of government.
All retail businesses place a tax surcharge on its products designed to offset losses to theft, pushing these losses off to the customer. One would think the the government would, in its mission of serving and protecting the people, enact these same surcharges on the health sector to bring back the trillions stolen through fraud and to combat fraud in the future. All of these examples are the top solutions for this problem with fraud yet we hear none of it in mainstream media. None of our elected officials, whether local, state, or national make any mention of these solutions. So it is hard to take seriously any announcements by Eric Holder......the anti-justice Justice.
Medicare Fraud Costs Taxpayers More Than $60 Billion Each Year
By CYNTHIA McFADDEN and ALMIN KARAMEHMEDOVIC
March 17, 2010
A four month "Nightline" investigation into Medicare fraud makes one thing perfectly clear: this is a crime that pays and pays and pays. The federal government admits that a staggering $60 billion is stolen from tax payers through Medicare scams every year. Some experts believe the number is more than twice that.
Obama administration takes initiative against health care fraud
Jeff Horwich: Later today, the Obama administration will announce a new initiative against health care fraud. They’re trying something new this time: Teaming up with private insurers. Marketplace’s Nancy Marshall-Genzer joins us now live, from Washington. Good morning, Nancy.
Nancy Marshall-Genzer: Good morning, Jeff.
Horwich: Nancy, what do you know about what the administration is going to do?
Marshall-Genzer: Jeff, the headline here is that the administration is going to work with insurance companies to ferret out fraud. Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius are spearheading this. And their plan is for federal investigators and private insurers to look at claims data for Medicare, Medicaid and private insurance. This is a rare instance where the government and private sector are working together.
Horwich: And what types of fraud will they be looking for?
Marshall-Genzer: They’re looking for patterns. For example, if a doctor billed for more than 24 hours in a day. I talked with Vivian Ho about this. She’s a healthcare economist at Rice University. She says investigators also compare healthcare providers in a given area.
Vivian Ho: So if there is one particular provider that’s providing a much higher rate of expensive diagnostic tests, say 400 or 500 percent more of those diagnostic tests than other providers in the area, then that’s a signal that there’s something suspicious going on.
Horwich: How big a problem is fraud?
Marshall-Genzer: Ho says the Center for Medicare and Medicaid services estimates that as much as $70 billion of the claims it pays out every year are fraudulent. Ho also says, for every dollar the government spends investigating fraud it gets $17 back.
YOU CAN SEE THAT THE STATEMENT BY AN NPR INTERVIEW IS FALSE AND MISLEADING. THE $70 BILLION IS MEDICARE ALONE AND IT IS THOUGHT TO BE DOUBLE THAT AMOUNT. THE SAME HAPPENS WITH FINANCIAL FRAUD WHERE ESTIMATES ON FRAUD ARE DELIBERATELY LOW. THIS SHOWS A CORRUPTED GOVERNMENT AND IS WHY THE CITIZENS OF AMERICA NO LONGER TRUST THEIR GOVERNMENT. THIS IS THIRD WORLD BEHAVIOR