Goldman Insiders Dumped Stock - kept info from shareholders

[chill_wind]

Sunday, April 25, 2010
Goldman's Wells notice was material to GS counsel--They dumped the stock!

Goldman's Wells notice was material to GS counsel--They dumped the stock! Goldman determined that the Wells notice wasn't material to Goldman shareholders, even though it promptly knocked $13 billion off of the value of the company.

Only Goldman can claim $13 billion wasn't material.

But Goldman insiders? They thought otherwise. They furiously dumped $65 million of their own holdings, while keeping the Wells notice information quiet!

CHICAGO (Reuters) - Five senior executives at Goldman Sachs Group Inc sold company stock after the firm received notice of possible fraud charges, according to a report in the Wall Street Journal.

The stock sales, which totaled $65.4 million, were made by co-general counsel Esta Stecher, vice chairmen Michael Evans and Michael Sherwood, principal accounting officer Sarah Smith and board member John Bryan.

http://aaronandmoses.blogspot.com/2010/04/goldmans-wells-notice-was-material-to.html

This guy's blog (Wall Street Manna) has a very interesting running commentary and chronology of Wall Street events over the last few years. A week ago he had the question ready:

Sunday, April 18, 2010
WSJ: What is material to Goldman?

Tonight we have this story in the WSJ:

Question: Was a Securities and Exchange Commission investigation into possible fraud at Goldman Sachs Group material to the Wall Street giant's investors? The stock-market verdict on that score was pretty clear: When news of the SEC's accusations surfaced Friday, Goldman's market cap fell by $12.4 billion.

Goldman appears to have taken a different view. It chose not to disclose in at least two recent regulatory filings that it had received in July 2009 a so-called Wells Notice. Such notices are a warning the SEC may bring an enforcement action against a firm or individuals. It also chose not to disclose it had received subpoenas from the SEC in August 2008, an indication it was under formal investigation by the SEC.

I relayed my own opinion on the Wells notices that Goldman didn't disclose. Goldman didn't update their filings because of the Wells notice that had gone out....Well, can investors now sue Goldman because the market determined that this was a material event, and Goldman didn't disclose it? Or does Goldman always just have a problem of disclosure.

http://aaronandmoses.blogspot.com/2010/04/wsj-what-is-material-to-goldman.html

[Skink]

1. I guess they are guilty then.

[Tierra_y_Libertad]

2. Maybe they should change their name to Genovese-Soprano. "It's just business."

[chill_wind]

3. Matt Taibbi in The Guardian yesterday:

Will Goldman Sachs prove greed is God?

The investment bank's cult of self-interest is on trial against the whole idea of civilisation – the collective decision by all of us not to screw each other over even if we can.


* Matt Taibbi
* The Guardian, Saturday 24 April 2010

(...)

Even if he stands to make a buck at it, even your average used-car salesman won't sell some working father a car with wobbly brakes, then buy life insurance policies on that customer and his kids. But this is done almost as a matter of routine in the financial services industry, where the attitude after the inevitable pileup would be that that family was dumb for getting into the car in the first place. Caveat emptor, dude!

People have to understand this Randian mindset is now ingrained in the American character. You have to live here to see it. There's a hatred toward "moochers" and "parasites" – the Tea Party movement, which is mainly a bunch of pissed off suburban white people whining about minorities consuming social services, describes the battle as being between "water-carriers" and "water-drinkers". And regulation of any kind is deeply resisted, even after a disaster as sweeping as the 2008 crash.

This debate is going to be crystallised in the Goldman case. Much of America is going to reflexively insist that Goldman's only crime was being smarter and better at making money than IKB and ABN-Amro, and that the intrusive, meddling government (in the American narrative, always the bad guy!) should get off Goldman's Armani-clad back. Another side is going to argue that Goldman winning this case would be a rebuke to the whole idea of civilisation – which, after all, is really just a collective decision by all of us not to screw each other over even when we can. It's an important moment in the history of modern global capitalism: whether or not to move forward into a world of greed without limits.

http://www.guardian.co.uk/business/2010/apr/24/will-goldman-prove-greed-is-god