QuoteOriginally posted by: KTE GS will have the best legal team possible to defend itself. The firm of Scalia, Thomas, Alito and Roberts.

QuoteOriginally posted by: onedollarhehe. The SEC is not going to win this case given the current facts, product and the investors clients involved.I don't think the "hehe" defense is a very strong one.

QuoteOriginally posted by: KTEGS will have the best legal team possible to defend itself. The government will have.....government lawyers.But GS suffers from something the government lawyers don't: mental illness. As good as a lawyer might or might not be, his incentives are not perfectly aligned with the client. The client has to make the right decisions and control the lawyer. Seeing how GS has handled this so far, I think they are doomed.The SEC has taken down plenty of people who were a lot smarter than anyone at the SEC. Smart people become vulnerable when they are not in their right mind, when their detachment from reality makes them easy prey. You will end up wondering how smart people lost such an easy game.On the other hand, maybe GS is total players, and they are making all perfect moves. If perfect moves are leading to such a crappy immediate outcome, they must be the captive of tragically bad moves in the past. Put differently, if they are innocent and getting tarred like this, they are mentally-ill screwballs. If they are so guilty that they have no choice but to get tarred like this, they better pack a lunch, it will be a long day.They should have fired this loser nine months ago, paid off the investors, and lived with the reality that nobody is perfect. If they are so cancerous that they can't admit to a single tumor, sell short. The only way settling this nine months ago brings down the house, is if the house is built on this. A guy who makes his living as a doctor can admit to bad cooking. In contrast, a chef has to deny it to the end.

You may be right. The SEC had Madoff handed to them by various tipsters wrapped in a bow for years and years, and they blew it horribly. Just how difficult woud it have been to uncover that fraud. Maybe a day's work inside his office? The SEC almost certainly wants some comeback in terms of credibility, especially with this Obama Administration and in the current public mood toward Wall Street. In the court of public opinion, GS has already lost. But don't count them out when it comes to this legal mess, and a mess is what they want, not a clear cut case.

http://finance.yahoo.com/tech-ticker/ar ... lsons-Role

QuoteOriginally posted by: grafixelhttp://finance.yahoo.com/tech-ticker/article/470063/The-SECs-Case-Against-Goldman%3A-Key-Questions-About-John-Paulsons-RoleThat article is silly. It keeps suggesting that nobody knew at the time that (a) the housing market was in a bubble (I knew, so did many others who commented publicly) and (b) that CDSs and CDOs were not going to blow up (Michel Lewis documents several people, including, if I recall right, those at GS, who knew and the blow-up probability because of highly correlated assets being sold as diversified was widely discussed in this forum -- though I am not sure about dates). Besides for anyone in this business to pretend they didn't know that just about every market is a bubble that blows up sooner or later is ridiculous. It is completely transparent with anyone with the eyes to see that those with the power to move markets sell shit to their clients with this cynical pretence of stability every day. This goes beyond playing poker where everyone gets to see all the cards on the board all the chips and all the bets and who is betting, to a rigged game where only a select few have that information.

QuoteOriginally posted by: FermionThat article is silly. It keeps suggesting that nobody knew at the time that (a) the housing market was in a bubbleIt is true, nobody at Goldman had any idea it would all crash. That is why they had to specifically design a bad investment, rather than grab any existing one off the board. If they knew it would all crash, then why design something new that is so bad you can hardy find buyers for it? Or if nobody knew it would crash, then why could they not place Paulson's entire bet? Either someone knew, or his specific bet was designed to crash.QuoteMr. Viniar said the firm did not have to have "skin in the game" but had to balance out the long and the shorts ? the long side was not balanced with the short side so Goldman filled in the gap as the broker. So Goldman could have had to take a short side position if the portfolio was too heavy on the long side.This is basically an admission that the portfolio was designed by the people who expected it to go down, designed to be shorted. It it were designed to the specifications of investors, of people who wanted to go long, the problem would then be finding those willing to take the short side. But there was already a supply of such "designed to succeed" investments, none of them being quite bad enough, or quite poorly diversified enough for Paulson to bet against.Can you imagine doing an IPO on a dotcom stock where the insiders were net short?Goldman Sachs: Structuring Doomed Garbage since 1834

Quote"Our overall losses in connection with the transaction exceeded $100 million including $83 million with respect to the retained long position. We certainly had no incentive to structure a transaction designed to lose money," Goldman's attorney said.If this quote is accurate, then taken together with the previous one, it proves they are lying scumbags.In this quote, Greg Palm tries to suggest that their investment position in the deal affected their incentives. But the previous quote says that their position was not known at the time the portfolio was designed. Rather, at the time they designed it, they expected to stick some misled investor with that loss.Their incentive to design something to fail, was their incentive to create something to satisfy the client's specifications. Of course they had an incentive to design something with whatever characteristics he wanted. Looking back, they may wish they had not designed something nobody wanted to buy. But incentives don't travel in time machines, and so Greg Palm is a lying scumbag...

If pointing out how they lost money on it only after nobody else would buy it - when owning it was never their original intention - is their best argument, then they are GUILTY.

>> If pointing out how they lost money on it only after nobody else would buy >> it - when owning it was never their original intention - is their best >> argument, then they are GUILTY. This is my understanding too. No one would take the long side of the trade, so Goldman did. The mess blew-up before GS could pass the hot potatoe.