Goldman Sachs, one of the most important financial institutions in the US suffered from the historic financial crisis in 2008, particularly because of the demise of insurer AIG given the systemic disruption in the markets and the collateral damage provoked by trading operations with AIG.…
Gorton Gary & Rouvenhorst Geert K.(2006) : Facts and Fantasies about Commodity fututes, Financial Analysts Journal 62, No2…
One of Dodd-Franks primary goals was to regulate “too big to fail” banks such as J.P. Morgan, Goldman Sachs, Citibank, and Morgan Stanley, in order to prevent further recessions at the hands of the financial industry. Unfortunately, this meant the act paved the way to future bail-outs, instead of preventing them. Dodd-Frank seeks only to regulate, and its only provision to ensure cooperation is a financial reward for whistleblowers. This incentive is not enough to outweigh the costs for most industry insiders, so the government ends up giving bailouts anyways…
Beginning in 2000, CMS Marketing, Services and Trading Company began to make energy trades that had no economic justification. As stated in the Securities and Exchange Commission cease and desist order ¡§CMS materially overstated its revenues, expenses and energy-trading volumes in 2000 and 2001 through the use of undisclosed round-trip energy transactions conducted by its Houston-based energy-trading division, MS&T.¡¨ These trades have now become known as "round-trip" trades. CMS issued false Press Releases describing the trades as low margin trades when in fact there were no margins. The Company admits that $5.2 billion of these trades were made in 2000 and 2001.…
In the recordings a Goldman Sachs employee states “Once clients were wealthy enough, certain consumer laws didn’t apply to them” Once you have obtained enough wealth you can pull the strings to favor yourself more. These recordings were provided by the ex-federal bank examiner Carmen Segarra. I believe the recordings of the conversations are legal to a certain extent. If there is malice involved, then the recordings are illegal, but in theory Segarra did not have a malicious intention. These recordings were necessary for Segarra to obtain evidence against the Federal Reserve, since they are a closed institution. Unfortunately, since she is a licensed…
As mentioned on this article, it is going to be very hard to curb commodities speculation, and this trading is spreading fast to an array of others goods that as the iron ore have been off-limits to investors because they aren’t traded on future markets. A real example is how the iron ore deals became in only two month one of the biggest commodities markets.…
The Dodd-Frank Wall Street Reform Act is a comprehensive reform sought to regulate the financial markets and prevent economic crisis. The act imposes a variety of new requirements regarding the business activities, capital, liquidity, governance and risk-management practices of large banking and financial service industries, to make the system safer (www.fsround.org). Within the next few years there will be new rules and regulations enforced by existing and new oversight authorities, which will create an unavoidable governance environment upon the banking and financial industry. The main purpose of this act is to avoid a repeat of the of the financial crisis in 2008 by promoting “the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big fail’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes” (http://useconomy.about.com).…
Given the condition of the global economy over the last few years, it is no surprise that political reform has played a major role in the structure of our financial system. Specifically, the Global Financial Crisis of 2008 (the “Crisis”), which resulted in the worst recession in the United States since the Great Depression of 1929, triggered the enactment of the Dodd-Frank Wall Street Reform Act (the “Act”) (Chan, 2011). The Act proposed changes to several areas of regulation, especially the trading of over-the-counter derivatives (OTC) (Amadeo, 2013).…
In fact, it’d be a stretch to state that the government is at all secret about its involvement with Wall Street. Blatant deregulations, policy changes that benefit banks and investors, as well as politicians recieving giant contributions from Goldman Sachs, Enron, etc., prove how connected the mentioned entitities are. Although Taibbi uses informal and at times vulgar laguagne to convey his frustration with the system, he supports his accusations with credible, eatil-oreinted…
Before the official passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, America had gone years without accountability for Wall Street and other large banks. Our country suffered its worst financial crisis since the Great Depression due to this failure to hold these banks liable for their actions. Businesses failed, the housing market crashed, personal savings were wiped out, and millions of jobs were lost. These are just a few of the repercussions that America suffered due to the financial crisis of 2007-2008. The passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act helped reestablish confidence…
Banks have made millions and indeed Billions of pounds in profit over the last 20 years at many peoples expense, through overblown interest charges and mortgage default payments for example. The top tie within these firms are paid gross bonuses and wages, that is extreme in an area of business.…
When financial fraud has occurred to the American people by the alleged “Too Big to Fail” banks on Wall Street, is it more productive to the economy and society to criminally charge the executives of these financial institutions or negotiate a civil penalty that compensates victims and reforms the deceptive trade practices of our nation’s largest banks? Further, if settlement is the best solution, why settle for the less money than the financial harm caused by the big banks? The following will discuss the negotiations behind the Securities and Exchange Commission’s (hereinafter referred to as “SEC”) settlement with Goldman Sachs & Co. (hereinafter referred to as “GS&C”) and Fabrice Tourre, one of the largest securities-fraud settlements to date.…
Food is a necessity and without food we wouldn’t be able to survive. But what happens when that very essential thing we need to survive is not good for us? According to the website Centers for Disease Control and Prevention (CDC), more than one-third of Americans have obesity (Adult Obesity Facts). One of the major reasons causing obesity is a poor diet, what some call, the Western Diet. In Michael Pollan article “Escape from the Western Diet”, he argues that people should give up the western diet. Pollan reaffirm readers, that those who indulge in the ways of the western diet are prone to a variety of chronic diseases. The western diet, he argues, is not good and should be put to an end. As Pollan asserts, people should focus more on eating…
The code of ethics of the company consists a large portion of text about the general code of ethics which is applied to every individual unit, but it emphasis less on the code for investment banking industry, such as insider dealing, money laundering,…
CORPORATE GOVERNANCE – HALIFAX BANK OF SCOTLAND. If this week's report into the failure of HBOS makes one thing clear, it's that the problem in finance today is not greed. That's far too optimistic. The deeper problem is self-delusion, and not just on the part of top bankers. HBOS failed in 2008 when it had to be bailed out by the British taxpayer, at a cost of £20bn. After a thorough investigation, the parliamentary commission on banking standards concluded today that HBOS represented a "colossal failure" of management and "a model of self-delusion". Given its reckless lending, HBOS would have gone down with or without a wider financial crisis, and what the commission found most shocking was the comprehensive inability of the top three HBOS bankers to even admit this. How do top bankers become so detached from wider society? Over the last 18 months I have interviewed more than a 150 people working in finance for a Guardian banking blog, and virtually all of them speak of their lives as taking place in a social bubble. Take Will Martindale, who worked in investment banking before "escaping" to Oxfam: "I never intended to work [at JP Morgan] for more than a year, but you get caught up. You work very long hours, surrounded by people who do the same, and they become your friends. You are all on a similar income, you eat at the same type of restaurants, go on the same kind of holidays, live in the same kind of apartments, develop the same hobbies. You don't see poverty, if only because you go to work very early and come home late, often taking a cab provided by the bank." That's how it starts and, as you climb the ladder, people become really rather nice to you. This is how a former top banker in treasury described his time in a bank that failed: "Risk produces profits, profits lead to a higher share price, and executive pay was linked to that. It was so fucking easy to manipulate the share price; simply take some more risk. "I was having a great time – travelled…