There is some justice ..........

[dieseltaylor]

Yep Goldman Sachs accused of fraud to the tune of $1billion dollars. I hope they get well and truly screwed and more dirt comes up.

A Director at a mortgage company ion the UK has been fined £504,000 for suppressing details of the number of mortgages in arrears.

Of course that does still leave an enormous number still to be nailed.

[Michael Emrys]

It would be nice if they would bag a few of the officials who let this go on for such a long time. This is the kind of thing we get left with when "De-regulation" and "Privatization" become the chic new thing in government. When government officials begin talking that kind of thing you can know that the fix is in and they have been bought off. Imagine if a hundred years ago they had begun talking about the socio-economic benefits of horse thieving and cattle rustling.

Michael

[Affentitten]

I'm sure they'll get exactly the same result that Exxon managed after 20 years of legal obfuscation and appeals over the Prince William Sound spill.

[dieseltaylor]

You could be right Affy

Apparently a Paulson employee wrote:

“It is true that the market is not pricing the subprime RMBS wipeout scenario. In my opinion this situation is due to the fact that rating agencies, CDO managers and underwriters have all the incentives to keep the game going, while ‘real money’ investors have neither the analytical tools nor the institutional framework to take action before the losses that one could anticipate based [on] the ‘news’ available everywhere are actually realized.”

So basically the economy is at the mercy of a cartel of boys playing with themselves but with real money belonging to millions of people. As victims of the excess seem to have little recourse then it is not surprising that a clamour for arbitrary justice is required.

My personal preference, given that ethical behaviour appears impossible, is to re-introduce the concept of the outlaw.

In the original democracy, Athens, those who hurt the state would be ostracised:

1 : a method of temporary banishment by popular vote without trial or special accusation practiced in ancient Greece

2 : exclusion by general consent from common privileges or social acceptance

I can live in hope.

Perhaps that is democracies defence against those who despite being always within the letter of the law in individual detail, the overall effect is bad for society.

[mike_the_wino]

A good stoning is in order.

[MSBoxer]

Can we start with the members of the House and Senate who blocked reform in 2005-2006? Admittedly, a lot of the damage had been done, but they could see the handwriting on the wall and chose campaign contributions over the security of their constituents.

Of course there are some in congress who are pushing sub-prime lending again under a new name. Idiots!

[Lt Belenko]

A good stoning is in order.

If you're smoking the right stuff, all stonings are good.

[gunnergoz]

I don't see much hope for real reform in the US until campaign finance laws are massively changed so that there is public financing of elections...either that, or an anonymous pooling of all donations combined with equal shares to all candidates. There has to be a way to separate deep-pocket vested interests from elected officials' campaign funds. Otherwise, the deep-pockets will continue to pour enough money into campaigns to buy votes in congress and to sway elections by massive propaganda campaigns. Change that system and I will then believe we have a chance to change other "broken" laws including the tax code.

[Michael Emrys]

A good stoning is in order.

I'm partial to tarring and feathering myself. On the other hand, I can think of no objection to combining the activities as long as the hot tar goes on before the stoning. And let's not forget castration and disemboweling as further options in case the first two become boring.

Michael

[Michael Emrys]

I don't see much hope for real reform in the US until campaign finance laws are massively changed so that there is public financing of elections...

I agree. As long as votes can be bought, they will be bought.

Michael

[JonS]

I don't see much hope for real reform in the US until campaign finance laws are massively changed so that there is public financing of elections...either that, or an anonymous pooling of all donations combined with equal shares to all candidates. ... snips ...

But, isn't that inimical to the concepts of freedom of speech and association, and privacy (and probably a few others)?

[Stalins Organ]

I don't know - it is? If so, how?

[JonS]

What is being requested here is a legal restriction - presumably backed by sanctions - on who I can give my own money to, and/or the removal of the ability to do so anonymously (or at least the ability to choose not to tell the whole world I'm doing it), and/or the ability to give my own money to 'him' but not 'her'.

I'm not saying that in this case it's a bad idea to do those things - in fact I think it's a good idea - but there are some fishhooks.

Perhaps the the bigger issue is the way companys are treated by the legal system?

[Michael Emrys]

Perhaps the the bigger issue is the way companys are treated by the legal system?

That would be a good place to start. First of all, eliminate the legal fiction that corporations are "persons". That would close one loophole right there as they would then have no constitutional right to freedom of speech or to contribute to candidates.

That would still leave the problem of wealthy individuals, but I believe there are already regulations on the books limiting how much they can contribute.

I suppose that crafty buggers will always be able find loopholes and ways around regulations, but perhaps we could reduce the scale of the operation. The whole point of all this is to increase the participation and representation of non-wealthy persons in democratic governance. Seems like that has to begin with showing them that they actually have a shot at that. But something also needs to be done to return civics to the educational curriculum. People need preparation to become responsible electors. I'm not sure that the cause of democracy will have been advanced very far if all they vote for is more circuses.

Michael

[Stalins Organ]

What is being requested here is a legal restriction - presumably backed by sanctions - on who I can give my own money to, and/or the removal of the ability to do so anonymously (or at least the ability to choose not to tell the whole world I'm doing it), and/or the ability to give my own money to 'him' but not 'her'.

There are already legal restrictions on who you can give money to - try donating to al Queda!!

[JonS]

That would be a good place to start. First of all, eliminate the legal fiction that corporations are "persons".

Probably off topic, but is there any upside to treating companies as persons?

I suppose that crafty buggers will always be able find loopholes and ways around regulations, but perhaps we could reduce the scale of the operation. The whole point of all this is to increase the participation and representation of non-wealthy persons in democratic governance. Seems like that has to begin with showing them that they actually have a shot at that. But something also needs to be done to return civics to the educational curriculum. People need preparation to become responsible electors. I'm not sure that the cause of democracy will have been advanced very far if all they vote for is more circuses.

You know, I'm tempted to agree, but I just don't think that would work. There is money to be made there, and there are more than enough sociopathic and psychopathic people (4% of the popn?) around to defeat any approach that depends on people behaving honourably.

In NZ we have what seems to me a generally pretty good system: each party gets allocated a certain amount by the govt, and that is all they are allowed to spend on electioneering. One drawback is that the amount that each party gets is proportional to their representation in the existing parliment, so it tends to perpetuate the status quo. Any monies raised from third parties gets spent on maintaining the party (meetings, salaires for party functionaries, etc), rather than electioneering, so there is scope for influence buying, but it's one-step removed and somewhat muted.

The big downside, though, is that recently certain groups have started copying the "Swiftboat Vets" approach, and clearly advocating for (or against) a particular party, while remaining at arms length from that party. There was some totally hamfisted and BS legislation introduced to try and stop that kind of shenanigans, but it was so badly written it got trashed. The issue of 'independant' third party advocates remains though.

[JonS]

There are already legal restrictions on who you can give money to - try donating to al Queda!!

Well, if there were a legally registered party called al Queda contesting an election here, then I could donate to them

But you're right: there isn't, so I can't

[Michael Emrys]

Probably off topic, but is there any upside to treating companies as persons?

It allows a small number of people to become insanely rich. Whether or not you regard that as an upside may depend on whether you are a member of that small number.

Michael

[Stalins Organ]

You can donate to all sorts of things that are not political parties ...massive donations to me are not illegal

[JonS]

Mike,

well, yeah, there's that. I kinda meant is there any upside to society

Stalin,

see if you can figure out why your comment is wholly irrelevant in the context of this thread?

Oh, Stalin, by the by I'm currently writing an essay on Park. I revisited that old essay you wrote for Orange, but it wasn't much use in this context, unfortunately

[dieseltaylor]

For an excellent explanation of what GS were involved in they appear to have got the idea from Magnetar who are taken apart here:

http://www.propublica.org/feature/all-the-magnetar-trade-how-one-hedge-fund-helped-keep-the-housing-bubble

It is chilling to see the complete lack of morals involved. It is a crime when a collapse is engineered and when you consider what a minor criminal receives and someone walks away with a $280M salary you know the world is not right.

Incidentally for those who believe the need to keep separate the guards and the inmates I see that late last year a 29 year old GS employee became COO in the SEC enforcement division. Sweet.

http://www.businessinsider.com/found-photo-of-adam-storch-29-year-old-goldman-guy-who-is-now-coo-of-the-sec-2009-10

[dieseltaylor]

And this has popped up. Now if you are like me you might think someone was being paid off before he left the SEC

The new inspector general report on the SEC's handling of the Allen Stanford alleged Ponzi scheme case paints a devastating picture of the agency's repeated failures to pursue the billionaire banker, despite a widespread belief within the SEC's Fort Worth office that he was a fraud.

At the center of the story is Spencer Barasch, the chief of enforcement at the SEC's Fort Worth office, who declined to pursue Stanford multiple times, only to later jump ship to become a partner at a big private law firm where he proceeded to represent none other than 'Sir' Allen Stanford.

The inspector general has referred Barasch to the bars of Washington and Texas, where he is licensed, for potential violation of conflict of interest rules.

Stanford is now in jail facing charges over an alleged $7 billion Ponzi scheme.

In March 2005, Barasch announced he was leaving the SEC after 17 years, with seven of those as the head of the Fort Worth enforcement division, for the international law firm Andrews Kurth. He joined the firm's securities enforcement team.

"I am excited to become a part of this premier law firm, and look forward to using my regulatory background and experience to provide an expanded level of service to the firm's clients," Barasch said in a Andrews Kurth press release.

A couple months later, Stanford Financial Group executives were looking for representation to help them handle a burgeoning SEC inquiry into the company. They got wind of Barasch's new gig and word made its way up to Stanford himself, who said in an email to an underling, "This guy looks good and probably knows everyone at the Fort Worth office. Good job."

A few days later, Barasch emailed an SEC ethics counsel to get the green light to work for Stanford. "I am not aware of any conflicts and I do not remember any matters pending on Stanford while I was at the [C]ommission," he wrote.

In fact, the IG found, Barasch was involved in deciding at least four times to close investigations of Stanford Financial or to not pursue findings by SEC investigators that the firm was a fraud.

The first of those came in August 1998 when Barasch, recently promoted to head of enforcement at the Fort Worth office, made the decision to kill a three-month old inquiry into Stanford's business.

Even though his staff had not "determined there was no fraud," Barasch said the matter was closed due to "some problems with the case," according to another SEC staffer's account quoted in the IG report. Those problems included the enforcement staff's belief that Stanford, though himself based in the U.S., did not have U.S. investors, along with the institutional "preference for 'quick hit' cases," according to the report.

But there was dissent in the SEC ranks over Barasch's decision.

In an interview with the IG, an SEC staffer who had reviewed Stanford's financial statements described her reaction as "shock and disbelief and this incredible feeling of failure and great disappointment".

In early 2001, Barasch received a complaint which began: "I am currently providing [redacted] services to an Antigua company and have become very concerned about the unusual activities of the Stanford Financial Group, a Texas based organisation, operating though subsidiaries on the Island." But nothing was ever done in response to the complaint, the IG found.

In 2002, the Fort Worth office's examination staff again looked at Stanford Financial and grew suspicious that "the international bank was a Ponzi scheme," one staffer told the IG. They discussed the matter with the enforcement staff and forwarded a report on Stanford to Barasch. But Barasch told the IG that he couldn't recall seeing it, and the IG found "no indication" that he ever read the report.

At a March 2005 conference in which an attorney with the Forth Worth office's examination division gave a talk on the Stanford case, Barasch looked "annoyed" and "summarily told [her] ... it was not something they were interested in" immediately after the presentation, according to IG interviews with SEC staffers. He told the IG he couldn't remember the presentation or the conversation.

The examination staff then deliberately waited until Barasch left the SEC in April 2005 -- to become a partner at Andrews Kurth on the firm's securities enforcement team -- to refer the matter yet again to the office's enforcement division, according to the IG.

The SEC ethics counsel denied Barasch's request to work for Stanford, made soon after he left the SEC. (In an email to an underling, Stanford reacted angrily: "This is bs and I want to know why the SEC would /could conflict him out.")

But Barasch was undeterred. "Approximately one year after the SEC's Ethics Office determined that Barasch's conflicts ... prevented him from representing Stanford in connection with the SEC investigation, Stanford retained Barasch to do just that," the IG report says.

He belatedly sought -- and was denied -- permission to represent Stanford Financial Group, but only after billing for 12 hours of work.

The IG has referred the matter to the bars in Washington, D.C., and Texas, where Barasch holds membership, as potentially violating professional ethics.

Barasch did not immediately respond to a request for comment. But in a statement provided by his firm, Andrews Kurth Managing Partner Bob Jewell said Barasch "served the SEC with honor, integrity and distinction" and did not violate conflicts of interest.

When the SEC finally sued Stanford for fraud in February 2009, Barasch was on the scene again, eager to represent Stanford, only to be denied permission. He described his thinking in an interview with IG investigators:

"In 2009 the whole thing blows up. Every lawyer in Texas and beyond is going to get rich over this case. Okay? And I hated being on the sidelines. And I was contacted right and left by people [to] represent them."

[Stalins Organ]

Jon - you were making a point about the use of your money being illegal in some new circumstances, and I noted that it already is I think.....so you are saying that your initial point is irrlevant?

I wouldn't expect that essay to be a lot of use - it was pretty shallow! lol

[Michael Emrys]

DT,

I take that as a typical example of a condition that has become "normal" throughout our government and society. Honor and honesty are a joke among many people. This is not new and has been common in government/business relations since at least 1980, but of course to a greater or lesser degree has always been a part of human intercourse. The thing is, these are no longer minor brush fires, exceptions to the rules of normal conduct. The brushfires have merged into a major conflagration that exceeds existing regulatory mechanisms. These latter have been gutted and/or strait-jacketed by the wave of deregulation that overtook us beginning in the late '70s.

Michael

[ASL Veteran]

There aren't many people on Wall Street who would shed a tear for Government Sachs. Many will just point to Lehman Brothers as an example of why. Hmmm, Treasury Secretary Paulson ... ex Goldman Sachs CEO ... just happens to feel that Lehman Brothers (Goldman Sach's largest and most powerful rival) just wasn't worthy of saving while virtually everyone else gets bailed out :mad:. Having said that though, the timing of this 'investigation' is certainly suspicious and the substance of what they are investigating is about the equivalent of investigating one of you for spitting on the sidewalk. Dark Pools? No, we don't want to look into that ... nothing to see there . Top that off with Goldman Sachs being represented by Obama's ex White House attorney and I smell a rat.

I know that it's hard for some of you to fathom, but the financial services industry was just as much a victim as anyone else in the banking collapse. True, the Financial Services industry is not guilt free, but there is way more going on here than 'evil banks' and 'lack of regulation'. The Government sets the rules of the game while businesses play the game within the rules that have been specified by the Government. The main cause of the banking collapse was the elimination of risk in the risk and reward equation. Basically, the more risky something is the more reward you should get. The other side of that is that if you invest in something risky you should get burned if you lose your bet. What if you had all reward and no risk? Meet Fannie and Freddie.

Now, for those who lack a high school grasp of business law:

"The corporation is one of the most important forms of business organization. To the large scale enterprise the corporate form makes financing easier by dividing the entity's ownership into many small units that can be sold to a wide range of investors. In addition to assisting the financing of operations, the corporate device offers a limited liability to the owners and a perpetual succession not affected by the death of any particular owner or by the transfer of the shares of stock of any particular owner."

My apologies to Steve in advance as I'm just using him as a simple and familiar example for those here who don't have a full grasp of the "Evil Capitalist" system.

So, let's say Steve at Battlefront wants to hire eight new coders to include Co Play into the next version Combat Mission and he lacks the cash for it. What to do? Well, maybe if he convinced some other 'investors' to give their money to him he could then hire the eight new coders and get the job done. Naturally those persons who give Steve his money want to get something back in return. This is the basis for owning stock in a company. By giving Steve their money though the investors take the risk that the money Steve gets from the sales of the new Co Play Combat Mission will be sufficient to pay what's known as a Return on Investment. If the return is not sufficient then the investors will take a bath. By giving Steve their money through Stock Purchases the investors have become part owners of Battlefront. This partial ownership also gives these investors some say as to how Battlefront is run as a business. So Steve gets his money but he surrenders some control. Pretty simple right?

So, let's say Steve creates a Combat Mission that deliberately introduces a virus into your computer that causes your whole house to catch fire and burn to the ground. A few of you might decide that Steve should pay you for your fire damage and 'pain and suffering'. Steve the individual has 'Unlimited Liability' and can be sued for everything he owns - and that includes any Weasels or BTRs that he's got hanging around on his property. A corporation has Limited Liability. Why is this important? Limited Liability ensures that the investors can only lose what they have invested in the corporation and leaves their Weasels and BTRs out of the picture. This is critical because a corporation can literally have millions of investors. If a corporation like GE didn't have limited liability then everyone who owned a single share of GE stock would have everything they own on the hook if GE was sued. That would be a ridiculous situation to say the least.

So let's say that Steve makes Combat Mission games until he's ninety and finally leaves this earth satisfied that he has made thousands of gamers happy. Guess what - things get a bit complicated when someone dies and an estate is left behind. However, if Battlefront is a corporation, when Steve moves on to that big game company in the sky there will be no discussion of Steve's estate because the corporation is it's own independent entity that never ever dies (unless you are Mr Enron or Mr Lehman, then you just collapse and disappear )

I hope that clears up what a corporation is and what it's role is.