Goldman again got off scot-free.
On August 9, the Justice Department dropped criminal fraud charges.
Evidence the equivalent of enough firepower to sink a carrier battle
group was buried and forgotten. More on what happened below.
Black's Law Dictionary says:
"Fraud consists of some deceitful practice or willful device, resorted
to with intent to deprive another of his right, or in some manner to
do him an injury."
It includes "all acts, omissions, and concealments which involve a breach
of legal or equitable duty, trust, or confidence justly reposed, and
are injurious to another, or by which an undue and unconscientious advantage
is taken of another."
The legal dictionary calls fraud:
"A false representation of a matter of fact - whether by words or by
conduct, by false or misleading allegations, or by concealment of what
should have been disclosed - that deceives and is intended to deceive
another so that the individual will act upon it to her or his legal
Criminal and civil frauds differ by level of proof required. The former
needs a "preponderance of evidence." The latter must prove intent and
be "beyond a reasonable doubt."
Goldman settled SEC charges for pennies on the dollar. What a business.
Steal a fortune. Pay a pittance back. Goldman writes it off as operating
Wall Street's business model reflects fraud and grand theft. Goldman
steals with the best of them. Take away dirty money and the whole system
collapses. It operates at the expense of investors and societies.
It profits hugely by swindling clients it calls "muppets." Small time
con artists rip off marks. Goldman loots on a grand scale. Even nations
are plundered for profits. It makes money the old-fashioned way. It
steal and get away with it unaccountably.
No avenue with potential is ignored. It's an equal opportunity predator.
Chairman/CEO Lloyd Blankfein calls it "doing God's work." Which one
he didn't say. The Supreme Court ruled he and other Wall Street giants
are immune from clients pursuing security fraud charges. Washington
alone can sue.
Wall Street's culture encourages fraud. It's rewarded handsomely
practically risk-free. The price for getting caught is chump change.
It pales compared to fortunes stolen. Betting against Goldman faces
long odds. Casino ones pay off better.
In April 2010, the SEC filed civil, not criminal, fraud charges. Goldman
and one of its vice presidents was accused of defrauding
investors by misstating and omitting key facts about junk assets tied
to subprime mortgages.
Huge profits were made as the housing market faced collapsed. Structured
and marketed synthetic collateralized debt obligations (CDOs) paid off
big. Their performance depended on subprime residential mortgage-backed
Goldman withheld vital information from investors. Doing so let the
firm and hedge fund investor John Paulson make huge profits. They correctly
bet against the housing market. They were touting junk as safe investments
Charges involved violations of Section 17(a) of the Securities Act of
1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange
Act Rule 10b-5. The SEC sought "injunctive relief, disgorgement of profits,
prejudgment interest, and financial penalties."
It settled for pennies on the dollar. It closed the books for $550 million.
It amounted to about four 2009 revenue days. It hardly mattered. No
executive was fined or imprisoned. Goldman was free to keep stealing.
Headlines left details most vital to reveal unexplained. Only scammed
In April 2011, the Senate Permanent Subcommittee on Investigations released
a report on how banking giants, federal regulators, and credit rating
agencies conspired to crash the subprime mortgage market.
Around 40% of it discussed Goldman. It sold an alphabet soup of securitized
junk. Garbage included mortgaged-backed securities (MBSs), collateralized
mortgage obligations (CMOs), and various other assets structured to
Combined, they sliced, diced, packaged, repackaged, and sold them in
tranches to sophisticated and ordinary investors. Many bought them unwittingly
through mutual funds, 401(k)s, pensions, and other investments.
The Senate listed federal security law violations. Goldman wasn't alone.
Other major Wall Street banks conspired with financial partners to steal
and get away with it. Justice Department officials and prosecutors got
enough evidence to hang them.
Committee chairman Carl Levin said the panel's two-year probe found
"a financial snake pit rife with greed, conflicts of interest and wrongdoing."
He recommended prosecution. He added:
"In my judgment, Goldman clearly misled their clients and they misled
On August 9, the Justice Department said it conducted "an exhaustive
review of the report." It concluded 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."
In other words, fraud charges don't matter. Whatever Goldman does is
OK. Stealing is how it does business. Obama officials find no fault.
Goldman expressed relief it's all over.
It knows Democrat and Republican Justice Department prosecutors won't
lay a glove on them. It's free to make money by stealing it.
Its only obligation is regular campaign contribution kickbacks, insider
trading tips, other ways for pols to profit and get rich, and financial
officials like Bernanke, Geithner, and others at Treasury and the Fed
getting sweet revolving door jobs out of Washington when or if they
plan to leave.
Each side helps the other. Political and Wall Street crooks conspire
to keep a sweet racket going. Corruption is a way of life. Congress,
administrations, the judiciary, and scoundrel media go along. Laws are
only for ordinary people. Predators are free to prey.
Accountability never mattered. Now it's laughable on its face. Bad as
things are now, expect much worse ahead. Massive fraud before 2007 crisis
conditions exacerbated hard times. Far greater trouble looms. Financial
wars lay waste like ravaging armies.
It's the system, stupid. Profiteering from plunder is too repugnant
to tolerate. It's lawless, dysfunctional, and corrupt. It's too far
gone to fix. Building a world fit to live in requires tearing it down
and starting over. Nothing less can work.
Stephen Lendman lives in Chicago and can be reached at firstname.lastname@example.org.
His new book is titled "How Wall Street Fleeces America: Privatized
Banking, Government Collusion and Class War"
Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge
discussions with distinguished guests on the Progressive Radio News
Hour on the Progressive Radio Network Thursdays at 10AM US Central time
and Saturdays and Sundays at noon. All programs are archived for easy