Goldman Sachs Fraud Case Introduction Goldman Sachs defrauded investors by failing to reveal the apparent conflict of interest on mortgage investment it floated as the housing market became sour. The charges that were brought forward by the Securities Exchange Commission against Goldman Sachs argued of unlawful action and fraud in the trading of toxic subprime mortgage derivative securities. Nevertheless, Goldman Sachs affirmed that they were merely following normal business practices and had not committed any wrong. The Goldman Sachs fraud case elicited critical issues centering on the inadequacy of the investment banking practices, and raised the question whether it is a case of deceptive or unethical behavior (Craig & Scannell, 2010). The three-month legal ordeal erased close to $20billion of the firm’s stock-market value. A lively public discussion that followed the charge of Goldman Sachs by SEC centered on whether Goldman Sachs, broadly viewed as an embodiment of bubble-era greed, was also a lawbreaker. Questions emanated on whether Goldman bankers warranted condemnation for deliberately exploiting the naivety of investors to gain from the trading of debt instruments that were bets on a market Goldman Sachs was doomed to collapse (Whalen & Bhala, 2011). Although, the transaction entailed in the SEC’s lawsuit can be regarded as small by Goldman Sachs’ standards, its arrangement allude to weighty questions regarding the fault of the banks in driving up a market within mortgage-derived securities that lingered practically inclined to self destruction (Buell, 2011). The SEC was asking whether Goldman Sachs gained from both sides in a way that contravened their fiduciary obligation to their customers. The SEC claimed that investors essentially lost over $1billion dollars, and that Paulson’s short option debt instrument on the credit instrument derived a profit of more than $1billion (Jones, 2010). Email traffic pointed out that Tourre plus others were aware of the subprime mishap as early as January 2007 before the crisis became full blown. The SEC sought a restriction, disgorgement of profits, and sanctions with regard to interest and civil monetary penalties (Craig & Scannell, 2010). In addition to these charges, criminal prosecutors were exploring whether Goldman Sachs or its employees committed securities fraud with regard to the firm’s mortgage trading. #1 The Fraud Goldman’s case entailed four forms of securities that all played some roles amid the 2008 financial downturn: first, the residential mortgage-backed securities (RMBS) embodying a form of security derived from pooling of mortgages on residential real-estate into bonds; a credit-default swap (CDS) representing a form of insurance policy; a collateralized debt obligation (CDO) representing a debt security collateralized by debt obligation; and, synthetic CDO’s (SCDOs) equivalent to ordinary to ordinary CDOs excluding that investors own CDOs on real securities rather than the real securities themselves. The Securities and Exchange Commission (SEC) filed a civil fraud charge against Goldman Sachs & Co, as well its vice presidents for fraud for misrepresenting information meant for investors by misstating key facts regarding a financial product connected to subprime mortgages at a moment when the housing market within the United States started to crumble and lose value (Buell, 2011). This was one on of the most significant case against Wall Street
Goldman Sachs Fraud Case Author Institution Abstract The charging of Goldman Sachs with fraud centered on the theory that the firm had traded a German bank (IKB) a derivative debt instrument attached to the fate of mortgage-backed securities, while at the same time concealing the flaws of the securities in that subject…
3. The United States has a great role to play in eradicating the issue of global poverty from the world. 4. Yes, the U.S should promote global growth by providing the poor nations with the necessary financial aid.
is American investment banking and securities organization which was founded in the year 1848 by Marcus Goldman, a Bavarian school teacher who had immigrated to the United States (Weinberg 2000). He moved to Philadelphia after supporting himself as a salesman for a number of years in New Jersey and soon after the Civil War, he relocated to New York City where he started trading in promissory notes in the year 1869 (Pratley, 2011).
Madoff Investment Securities LLC, has been performing its operation as one of the agents and/or brokers in the securities dealing segment. The company was initiated in the year 1960 in New York and has been rendering numerous services to the banks, financial institutions as well as broker and dealers (Bloomberg Businessweek, 2011).
Despite the merit reaped from the conduction of online transaction, internet fraud, which refers to intentional deception of a person by another for personal gain by the use of internet, is on the increase. This has led to numerous victims as the criminal usually diversify their means of attack.
Accounting fraud Introduction Academic research papers are organized to meet professional standards and follow defined formats with distinct elements. Exploration of background information into a research, development of problem statement, research questions, research hypotheses, and methodology, and implementation of the methodology are some of the fundamental elements of an academic research paper.
Fraud activities have in the recent times increased as many people are desperate and are engaging themselves in crime as they try to make ends meet and hence participating in the acts of fraud in their work places and other institutions. Fraud-fighting actions can be categorized into three main groups: prevention, detection and investigation.
Some of the more modern evolved forms of healthcare fraud are seen to variously include various program abuse activities that might include the setting aside of some of the discounted drugs and thus making them unavailable to that happen to be in need, pill-mill schemes where prescriptions are falsely billed, organized criminal schemes and counterfeit drug activities (Busch, 2012).
The effects of this fraud on companies and shareholders have been illustrated. Recommendations have been given about how to minimize these adverse effects. Some real life cases have been talked about so as to get a better