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Posts Tagged ‘John Paulson’

The Only Real Question Regarding Goldman’s Settlement with the SEC

Posted by Larry Doyle on July 16th, 2010 7:34 AM |

Who’s next?

We can debate all day long whether the settlement of SEC charges against Goldman Sachs for $550 million is fair or not. While that debate will occur all over Wall Street and throughout the world of global finance today, the question regarding the size of this settlement is not important in and of itself. I am not saying that $550 million is not a lot of money. Nor am I saying that Goldman may be getting off easy. The only question I have is, “Who’s next? ”

Are we to think that the Goldman Abacus-CDO transaction is the only ABS-backed CDO that employed improper marketing? Do not be so naive. In fact, if Goldman employed improper marketing in one deal, are we to believe they did not do the same in many others? Do you ever find just one mouse? (more…)

Indict, Prosecute, Convict the Fraudsters…Or Else!!

Posted by Larry Doyle on June 2nd, 2010 1:20 PM |

Has America lost the courage to aggressively address those who commit fraud? Is the American public even aware of the massive fraud perpetrated by those in our financial system which led to our current economic crisis? Are those in Washington willing to take a stand, risk their own skins, call out those engaged in fraud, even if some of the fraudsters occupy neighboring seats at nearby regulatory bodies?

Unless we find people in our government who are willing to make these calls, repeat them publicly in a long, loud fashion, and compel prosecutors to issue indictments, then I fear our union will pay a price and incur a cost that may be immeasurable.

Why so strong? Why so strident? (more…)

The World of Wall Street CDOs or “Don’t Lie to Me”

Posted by Larry Doyle on May 13th, 2010 2:18 PM |

News that the SEC and federal prosecutors are further investigating Wall Street firms involved in the structuring and distribution of CDOs (collateralized debt obligations) is not a surprise. Although Goldman Sachs has been targeted initially for its marketing of an Abacus transaction in conjunction with Paulson and Co., the simple fact is Goldman was not anywhere close to the largest player in this space. Who was? Well, I should more appropriately ask, “Who wasn’t?” All of Wall Street jumped on the CDO gravy train. (more…)

SEC Charges Goldman Sachs with Fraud

Posted by Larry Doyle on April 16th, 2010 11:21 AM |

The Washington Post just reports, SEC Accuses Goldman Sachs of Civil Fraud:

The Securities and Exchange Commission announced Friday civil fraud charges against Goldman Sachs and one of its vice presidents. The agency alleges that the company marketed complex subprime mortgage securities and failed to disclose to investors that a major hedge fund had bet against the securities.

Goldman Sachs shares fell 7.4 percent.

Goldman was down 7.4% and is now down 14%!! This opens an enormous can of worms for the entire industry.

What other dealers engaged in similar activities? Hedge fund manager John Paulson who made billions in shorting the sub-prime market is being tied to this investigation. If Paulson aided and abetted a fraud, then he deserves to pay in spades. Sense on Cents will be monitoring closely. If it is deemed that Goldman did commit fraud, all people involved are supposed to pay with more than just fines.

Let’s go back to March 2, 2010 when I appeared on CNBC’s Street Signs and warned of Goldman’s greatest risk (at the 3-minute mark of the video):


Wall Street’s Next Big Trade…

Posted by Larry Doyle on January 4th, 2009 7:45 AM |

Secretary of the Treasury Henry Paulson has become a household name over the course of 2008. Paulson has been roundly criticized for his mixed messages and inconsistent use of funds from the $700 billion TARP (Troubled Asset Repurchase Program).

While most of us have seen more of Henry than we would have ever cared, allow me to introduce you to another Paulson. John Paulson (no relation to Henry) is one of the most highly acclaimed and profitable hedge fund managers on Wall Street. While investment banks, hedge fund managers, and most asset managers were investing in and promoting sub-prime mortgages and the like, John Paulson was “going the other way.” In 2006, he started shorting sub-prime originators, the ABX (the CDS index that tracked the sub-prime market) and the investment banks that most heavily trafficked in this sector. He personally and the investors in his fund made tidy fortunes in the process.

The reason for my introducing you to John Paulson at this juncture is because he wants to enter the world of community banking. One may wonder why a titan from Wall Street would want to enter into the world of regional and community banking.

This past summer, the first large bank to fail was Indymac Bank located in Pasadena, CA. Since then there have been another 24 banks that have failed with another 200 on the FDIC “watch list.”

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