Thursday, April 29, 2010

Bainbridge on Goldman imbroglio
Tom Smith

Here.  Seems about right to me.

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Tom Smith


If you are a market maker you have no fiduciary responsibility to your client. If you are an advisor, you do. Goldman acts as both, as it suits them, not their client.
Volcker rule could restore the separation of the businesses, as it was before, to avoid raping the clients, which they've done in the past. They are against this rule, obviously. They would rather destroy all credibility to wall street investment advice. Again.

Posted by: athena | Apr 29, 2010 8:22:47 AM

Sorry, Tom, but Prof. Bainbridge's comments are exactly wrong. I'm guessing Prof. Bainbridge is angling for some work from Goldman Sachs.

It its Complaint, the SEC alleges: GS&Co and Tourre also knowingly, recklessly or negligently misled ACA into believing that Paulson invested in the equity of ABACUS 2007AC1 and, accordingly, that Paulson’s interests in the collateral section process were closely aligned with ACA’s when in reality their interests were sharply conflicting." (Para. 70.)

In other words, Goldman told ACA that Paulson was long, when Paulson was in fact short. That's a lie about a material fact. That's illegal.

You should spend a few minutes with the actual Complaint rather than relying on second-hand sources - especially when one second-hand sources is an Epicurean/wannabe baller who earns money from consulting. Bainbridge will make much more money praising Goldman Sachs than in burying them. Thus, his posts should be viewed suspiciously - as advocacy rather than as scholarship.

Posted by: Mike | Apr 29, 2010 11:15:47 AM

And here:’t-know-sht-about-securities-law-or-goldman-case

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