STOCK MARKET WATCH, Wednesday, December 14, 2011

[jtuck004]

117. Wait, wait,wait. Fraud is illegal?

Then shouldn't the folks reported about here be facing criminal penalties as well as a civil lawsuit?


From the article...

Fabrice Tourre, a Goldman Sachs Group Inc. executive director facing a fraud lawsuit in the sale of a mortgage-linked investment, said an index that facilitated derivatives trading in the market was “like Frankenstein.”

The so-called ABX index is “the type of thing which you invent telling yourself: ‘Well, what if we created a ‘thing,’ which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?’” Tourre said in a Jan. 29, 2007, e-mail released yesterday by Goldman Sachs. Watching the index fall is “a little like Frankenstein turning against his own inventor.”
...
A few months later, a June 13, 2007, e-mail shows Tourre claiming,“I’ve managed to sell a few Abacus bonds to widows and orphans that I ran into at the airport, apparently these Belgians adore synthetic ABS CDO2,” using short-hand for asset- backed collateralized debt obligations squared, or CDOs made up of tranches of CDOs containing asset-backed securities.
...
“My basic message is let’s be aggressive distributing things because there will be very good opportunities as the markets goes (sic) into what is likely to be even greater distress and we want to be in a position to take advantage of them,” Chief Financial Officer David Viniar wrote in a Dec. 15, 2006, e-mail to a colleague.

If we are lucky, however, maybe someone will try to convince us such behavior is just immoral. Then maybe we could look to GS to supply, say, Aides for the Treasury Department, among some of our other needs.