The Washington Post reports, SEC Accuses Goldman Sachs of Civil Fraud:

The Securities and Exchange Commission announced Friday civil fraud charges against Goldman Sachs and one of its vice presidents. The agency alleges that the company marketed complex subprime mortgage securities and failed to disclose to investors that a major hedge fund had bet against the securities.

Goldman Sachs shares fell 7.4 percent.

Goldman was down 7.4% and is now down 14%!! This opens an enormous can of worms for the entire industry.

What other dealers engaged in similar activities? Hedge fund manager John Paulson, who made billions in shorting the sub-prime market, is being tied to this investigation. If Paulson aided and abetted a fraud, then he deserves to pay in spades. Sense on Cents will be monitoring closely. If it is deemed that Goldman did commit fraud, all people involved are supposed to pay with more than just fines.

Let’s go back to March 2, 2010 when I appeared on CNBC’s Street Signs and warned of Goldman’s greatest risk (at the 3-minute mark of the video):

When you sleep with dogs, you wake up with fleas.


Related Sense on Cents commentary:
A Wall Street Insider’s Views on Goldman Sachs

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  • ahs

    My response was to sowsear, not to you, in the first place.  Regardless, I saw no mention of an income/payroll/corporate distinction, yet sowsear was floating the 47% number as if it applied to taxes generally.  /shrug

    But thank you for your measured, reasonable response.  Always a pleasure.

  • Ferd Berfle

    That 47% figure only refers to income taxes.
    You are a dumbshit, ahs. What the fuck do you think I was commenting on, you blithering idiot? My comment WAS about income taxes. Check you banal commentary at the door. Moron.

  • AC

    He’s such an idiot!  What are we going to do?

  • AC

    You’re on to something Ferd, but that would mean that policy makers would use their brains.  But alas, they’re in Scarecrow country and Dorothy is nowhere to be found.

  • sowsear
  • sowsear

    How about Lt. Col Larkin who refused to recognize Obama as his C-in-C.
    He has been reassigned to the Walter Reed Army Hospital, but not to tend the wounded…

    If BO doesn’t want it, it gets buried…somewhere.

  • sowsear

    Just the other day, BO dared the GOP to try to defeat his banking bill, now he thinks it needs to be modified…

  • sowsear

    See below, on the political implications. Article says civil charges are not going to do much. If Obama were serious there would be criminal charges.

  • sowsear

    The politics of the Goldman case…nothing there

  • oowawa

    Reading the comments on MarketWatch today about this subject, quite a few commenters suggested the same thing . . .

  • TeakWoodKite

    Ferd, I thought it was a backhanded way of saying BO is a dangerously polarizing person.

    He merely voiced the last part and infered the first. I have no illusions that the left is scared shitless politically. They should be. The thought of an American being sanctioned without prejudice, however, is no big deal…


  • oowawa

    Yep, when it appears that they are throwing Goldman Sachs under the bus, you’ve got to be suspicious that it is an attempt to distract us from something else . . .

  • Ani

    Larry,  Thanks so much for covering this.  Typically, they release it on the Friday night document dump.

  • Armymom

    I’m suspicious of the timing of this law suit. I don’t trust it.

  • confused American

    A bit off topic Republicans have gained some more favorability in the polls 
    Been in the +2% spread above the Democrats for the last couple of months and now are at +3.2% spread above the Democrats according to RCP 
    Republicans 45% approval   Democrats 41.8% approval. 

     Another OT subject
    Sens. Lieberman, Collins To Subpoena Obama Admin Over Nidal Hasan Investigation

  • TeakWoodKite

    Dam idiots. The first clue was the Title. It had the word “DREAM” in it…. REAM.

    mmm. (I am looking in the medicine cabinet for my presription of Donna Brazille sayings)

  • TeakWoodKite

    The O-Tang flowed endlessly.

    I wonder how much “stock” BO own’s in GS?, You think they called the creep and gave him a heads up? Some Martha Stewart he is eh?

    Nothing like burning POTUS in a game of musical money chairs…It’s just bad biz…to not give ’em a heads up. Insider trading is alive and well in the west wing. oops it’s in a Northen Back blind trust? I didn’t know? (would that be the same trust you McMansion is in?)

    I saw that the 5 mil BO “earned” was was from book sales….what a scam.