Saturday, August 25, 2012

Left Side of the Aisle #70 - Part 1

Update on: DOJ will not prosecute Goldman Sachs

Last week, in the Outrage of the Week, I blasted the DOJ for its decision to not prosecute Goldman Sachs despite the clear evidence of massive fraud committed by the firm. I noted then that, quoting myself,
the agency did grandly allow as how it would take another look if new information comes to light - that is, if someone else will do all the work of research and investigation and drop an air-tight case into their laps with such a loud plop that it can't be ignored.
Apparently, I was not the only person thinking that. The same day I said that, Matt Taibbi wrote on his blog at Rolling Stone magazine that "AG Eric Holder has no balls." He wrote that
our prosecutors and regulators have basically admitted now that they only go after the most obvious and easily prosecutable cases. The only white-collar cases they will bring are absolute slam-dunks.
How bad is this? Taibbi noted that the Congressional report Holder ignored included, for example, proof that in one case Goldman claimed, in writing, that it was fully "aligned" with the interests of its client, Morgan Stanley, because it held a $6 million slice of the deal. What Morgan Stanley wasn't told is that Goldman had a $2 billion short position against the same deal. That is, it had a few million invested in the deal - but stood to gain a couple of billion if it fell apart.

"If that isn’t fraud, Mr. Holder," Taibbi asked, "just what exactly is fraud?"

And Goldman Sachs is not the only recent example. The DOJ is apparently going to end its what it called an "investigation" into MF Global without filing any criminal charges. MF Global is - or was, it's now bankrupt - a brokerage and commodities company headed by former NJ Gov. Jon Corzine.

The company lost money - and I don't mean lost in a bad deal or as the result of a change in the market, I mean just lost, as in just can't find - some $1.6 billion in customer funds. That charge was that the investor's money was stolen and given to JPMorgan Chase in an attempt to cover MF Global's losses. But doggone it, our Justice Dept. just finds it too darn hard to prosecute a case like that. Instead, it has concluded that "chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear."

Oh, well, I guess that's all right, then, and all those people who lost large amounts of money just should be grateful for the DOJ's diligent efforts.


No comments:

// I Support The Occupy Movement : banner and script by @jeffcouturer / (v1.2) document.write('
I support the OCCUPY movement
');function occupySwap(whichState){if(whichState==1){document.getElementById('occupyimg').src=""}else{document.getElementById('occupyimg').src=""}} document.write('');