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***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!***
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snark 
User ID: 790439
11/5/2009 10:45 AM
Report abusive post | ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!***
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[link to twitter.com]
Galleon benefited from info regarding other customer trades. This is BIG. We'll see if Goldman itself gets caught in the net.
T For Texas, T For Tennessee!
[link to snarkista.mybrute.com]
The virtue of courage is a prerequisite for the practice of all other virtues, because otherwise one is virtuous only when virtue has no cost. There are times when something needs to be done, and yet we know that if we step up and do this needful thing, we will pay a heavy personal price. -C.S. Lewis |
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Anonymous Coward
User ID: 419159
11/5/2009 10:46 AM | | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
if there is any justice in the world, goldman sachs will be destroyed along with the other thieves running the show. |
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Anonymous Coward
User ID: 419159
11/5/2009 10:46 AM | | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
I am calling for :pin: in hopes this snowballs into real justice |
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Anonymous Coward
User ID: 497757
11/5/2009 10:47 AM | | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
[ link to twitter.com]
Galleon benefited from info regarding other customer trades. This is BIG. We'll see if Goldman itself gets caught in the net.
AWESOME!
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snark
User ID: 790439
11/5/2009 10:48 AM
| | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
The back-story:
[link to www.businessinsider.com]
Late last night the Financial Times broke the news that the hedge fund firm Galleon Group paid $250 million to its Wall Street banks last year in return for received market information that other investors did not get.
Those banks need to come forward immediately and explain what information they were selling to Galleon
The FT's report didn't specify which banks provided the information but noted that Morgan Stanley and Goldman Sachs
were Galleon's top providers of hedge fund services and prime brokerage. Both declined to comment on the story. But the allegations are so explosive that both firms are going to have to start talking.
The problem is that Galleon allegedly got more than just "market color" or advanced looks at analyst views through market "huddles." The firm was known for pushing its contacts at banks for hints about big buy and sell orders. If either Goldman or Morgan Stanley were supplying this, it sounds like they were allowing the fund to front-run their other clients.
We expect that both Goldman and Morgan Stanley will explain that their employees are barred from divulging details about clients' trading orders to other clients. But this does not go far enough. They need to explain exactly what "edge" was being given to Galleon if they want to maintain their credibility. Right now the continued silence looks like an admission.
We expect that lots of calls are being made right now to Goldman Sachs and Morgan Stanley from clients demanding to know exactly what Galleon was told.
If the worst suspicions turn out to be true--that either Goldman or Morgan Stanley were tipping off Galleon about big client orders--there will have to be individuals held accountable and a clearing of the decks in the prime brokerage units. Any hedge fund or institutional investor doing business with these firms will demand to know that whoever was leaking order information to Galleon is no longer in a position to keep leaking to favored clients.
Another question that needs to be answered is if any other high-velocity hedge fund clients are getting this high-definition version of market color. Competition for prime brokerage business is fierce, and we can imagine how tempting it must be too offer big clients "extras" in order to keep them from defecting to rivals. Everyone would love to have a Galleon or an SAC Capital trading through their desk.
Goldman and Morgan Stanley are probably scrambling now to figure out what their reputational exposure to the Galleon case is. They'd better move fast. Because when it comes to allegations of betraying client trust, silence equals death.
T For Texas, T For Tennessee!
[link to snarkista.mybrute.com]
The virtue of courage is a prerequisite for the practice of all other virtues, because otherwise one is virtuous only when virtue has no cost. There are times when something needs to be done, and yet we know that if we step up and do this needful thing, we will pay a heavy personal price. -C.S. Lewis |
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snark
User ID: 790439
11/5/2009 10:50 AM
| | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
10 YEARS worth of insider-trading. Wonder if anyone will be "suicided".
T For Texas, T For Tennessee!
[link to snarkista.mybrute.com]
The virtue of courage is a prerequisite for the practice of all other virtues, because otherwise one is virtuous only when virtue has no cost. There are times when something needs to be done, and yet we know that if we step up and do this needful thing, we will pay a heavy personal price. -C.S. Lewis |
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Anonymous Coward
User ID: 778753
11/5/2009 10:52 AM | | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
Pin!
Where's the older story re: GS front loading using their highly secret technology? Remember that?
This is the second time (that I know of in recent times) GS is being implicated in illegal trading activities. |
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Anonymous Coward
User ID: 778753
11/5/2009 10:55 AM | | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
10 YEARS worth of insider-trading. Wonder if anyone will be "suicided". Quoting: snark
Yeah cause you know nobody is going to prison.  |
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snark
User ID: 790439
11/5/2009 10:56 AM
| | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
A tipster:
[link to www.allbusiness.com]
Oct. 22--A woman who until this summer lived in Atherton has been identified as the key informant in an insider trading case that has led to the arrest of six people, including the co-founder of the New York-based Galleon Group of hedge funds.
-- including employees of the consulting firm McKinsey and Intel -- are accused by the Securities Exchange Commission and U.S. Department of Justice of swapping inside information to make stock investments in a series of high-tech companies.
The companies include Silicon Valley's Sun Microsystems, Advanced Micro Devices, Polycom, Intel and Google.
Rajaratnam, free on $100 million bail, announced Wednesday that he is closing Galleon Group in the face of heavy requests for withdrawals from investors.
An unidentified informant who once worked for Galleon in the 1990s was caught making trades on nonpublic information and became a key witness in the investigation, according to federal complaints.
The Wall Street Journal reported Wednesday that the informant -- identified as "Confidential Witness" or "CW" by prosecutors and "Tipper A" by the SEC -- is Roomy Khan, a 51-year-old stock trader who lived until recently in a palatial home in Atherton.
The Journal said Khan began cooperating with the government in November 2007 after the New York Stock Exchange spotted unusual trading in shares of AMD and Hilton Hotels and turned the information over to the SEC.
The criminal complaint, filed in federal court in New York, described the "CW" as someone who has agreed to plead guilty to charges of conspiracy and security fraud in the hope of receiving a reduced sentence.
More at link: [link to www.allbusiness.com]
Last Edited by snark on 11/5/2009 at 10:58 AM
T For Texas, T For Tennessee!
[link to snarkista.mybrute.com]
The virtue of courage is a prerequisite for the practice of all other virtues, because otherwise one is virtuous only when virtue has no cost. There are times when something needs to be done, and yet we know that if we step up and do this needful thing, we will pay a heavy personal price. -C.S. Lewis |
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snark
User ID: 790439
11/5/2009 11:02 AM
| | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
The fab Matt Taibbi on Goldman's front-running:
Goldman Sachs is reeling under public pressure
"You acknowledge that we may monitor your use of the Services for our own purposes (and not for your benefit). We may use the resulting information for internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory body and in compliance with applicable law and regulation."
via Is Goldman Legally Frontrunning Its Clients? | zero hedge.
After watching its thoroughly maladroit handling of several p.r. problems this week, I’m absolutely convinced that Goldman Sachs can be hurt if enough people keep piling on with the pressure. The latest evidence of this is its abject collapse in the face of questions from Zero Hedge about the possibility that it is using the data its takes from users of its website to front-run those same people.
Front-running takes place when a bank or broker-dealer– say, Goldman, Sachs — executes a trade for its own account before filling its customer’s order. Since a large enough trade (executed by institutional investors, for instance) can actually move the price of the security in question, front-running can be a very profitable activity. It’s sort of like fast-food insider trading. It is common knowledge that front-running on Wall Street is rampant, and I interviewed more than one person for my recent Rolling Stone story who accused Goldman of front-running its big clients in all sorts of arenas, from the internet IPO years to the commodities markets.
What caught Zero Hedge’s attention was a curious disclaimer uncovered on Goldman’s website, which includes a trading platform that visitors can use to execute trades. At one point the disclaimer read:
Monitoring by GS: Your use of the products and services on this Web site may be monitored by GS, and that the resultant information may be used by GS for its internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory organization.
Subsequently readers uncovered an even more sinister disclaimer that appears on other Goldman documents (see the quote at the top of this post with the key line “and not for your benefit”). So Tyler Durden over at Zero Hedge wrote to Goldman to ask if this meant what it quite obviously seems to mean, and got this response from the bank’s Senior Vice Scoundrel, Ed Canaday. Note the way he seems to be addressing Dick Durbin, which looks like a case of wish-fulfillment to me:
Dear Mr Durbin:
This is in response to your recent blog about our web site disclaimer. It is quite usual for websites to have disclaimers that refer to the monitoring of site usage. Most web sites, including yours we noticed, track usage by their visitors. This is primarily used for marketing and to help inform decision about enhancing content.
Your suggestion that we monitor our web site to facilitate front-running is untrue and offensive.
Sincerely
Ed Canaday
Vice President
Goldman, Sachs & Co.
In exactly the same manner that Goldman demonstrated with regard to my story, Canaday avoided any of the factual concerns that Zero Hedge presented about the curious disclaimer; in fact his letter, if anything, is such a classic non-denial denial that it really just confirms everyone’s worst suspicions. Most notably, he doesn’t specify what “internal business purposes” the company is talking about, and while he insists it is not front-running, it’s a very thin, curiously worded denial.
That a company as rich and powerful as Goldman would stoop to peering through the web version of a locker-room peephole to make a few extra pennies either front-running random trades or somehow using visitor data “not for their benefit” shows how completely and utterly morally absent this company is. There is not an ill-gotten dollar they will not chase, no matter how small or insignificant the sums might be.
Word should be spread about this and anyone who used the Goldman 360 portal for trading should seriously investigate this situation, as it is entirely possible you’ve been ripped off — legally, perhaps, although how much “legality” a disclaimer like that can confer is a serious question in my mind.
More to the point, the fact that Goldman is getting enough public pressure that it feels it has to respond to these queries shows that the company is reeling. And the fact that their public statements have been so hilariously transparent and clumsy shows that they’re rattled and don’t know how to handle this kind of heat, which they’re not used to getting. Kudos to Zero Hedge for applying the pressure; readers who want to see Marla Singer’s very funny response to Canaday should read here. [link to www.zerohedge.com]
Taibbi: [link to trueslant.com]
Last Edited by snark on 11/5/2009 at 11:05 AM
T For Texas, T For Tennessee!
[link to snarkista.mybrute.com]
The virtue of courage is a prerequisite for the practice of all other virtues, because otherwise one is virtuous only when virtue has no cost. There are times when something needs to be done, and yet we know that if we step up and do this needful thing, we will pay a heavy personal price. -C.S. Lewis |
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snark
User ID: 790439
11/5/2009 11:12 AM
| | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
Tyler Durden at Zerohedge has the complaint PDF:
[link to www.zerohedge.com]
T For Texas, T For Tennessee!
[link to snarkista.mybrute.com]
The virtue of courage is a prerequisite for the practice of all other virtues, because otherwise one is virtuous only when virtue has no cost. There are times when something needs to be done, and yet we know that if we step up and do this needful thing, we will pay a heavy personal price. -C.S. Lewis |
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snark
User ID: 790439
11/5/2009 11:20 AM
| | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
PLEASE let there be Goldman personnel on these wiretaps!!
Nov. 5 (Bloomberg) -- Federal prosecutors told a U.S. judge they have “more than one” witness ready to testify against Raj Rajaratnam, the Galleon Group hedge fund founder accused of directing an elaborate insider-trading ring.
The government made its disclosure yesterday in court papers in New York opposing Rajaratnam’s request for reduced bail.
“The weight of the evidence against the defendant is overwhelming,” assistant U.S. attorneys Joshua Klein and Jonathan Streeter wrote. “This case involves wiretap evidence of the defendant making incriminating statements and would be strong even absent the testimony of any cooperating witness. In addition, there is more than one cooperating witness.”
[link to www.bloomberg.com]
T For Texas, T For Tennessee!
[link to snarkista.mybrute.com]
The virtue of courage is a prerequisite for the practice of all other virtues, because otherwise one is virtuous only when virtue has no cost. There are times when something needs to be done, and yet we know that if we step up and do this needful thing, we will pay a heavy personal price. -C.S. Lewis |
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Anonymous Coward
User ID: 808177
11/5/2009 11:41 AM | | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
if there is any justice in the world, goldman sachs will be destroyed along with the other thieves running the show. Quoting: Anonymous Coward 419159
Whaddaya mean? They had one whole day this quarter where they booked trading losses and ONLY made $100m+ 36 days this quarter compared to last. They aren't 'manipulating' - just getting basically free money from the taxpayer by timing their treasury buys!
[link to www.ft.com]
Trading in the US fixed-income market this year has been dominated by the Federal Reserve, which recently finished buying a planned $300bn in Treasury debt, and is on track to complete buying $1,250bn of mortgage securities by the end of March. These purchases have helped keep market rates low and also normalised the relationship between government bonds and other fixed-income securities.
Dealers say banks have made big profits by the timing of Fed purchases of government debt and subsequent Treasury debt sales, and by betting that the relationship between Treasury bonds and other fixed-income securities would normalise.
They wouldn't possibly have someone inside the Treasury working for them, would they? Geithner, etc. are surely EX-employees, right? |
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Anonymous Coward
User ID: 778753
11/5/2009 11:56 AM | | Re: ***BREAKING!! DOJ Files Insider-Trading Charges Against Goldman Sachs' Client Galleon!!*** | Quote |
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