It doesn’t happen often, but sometimes God smiles on us. Last week, he smiled on investigative reporters everywhere, when the lawyers for Goldman, Sachs slipped on one whopper of a legal banana peel, inadvertently delivering some of the bank’s darker secrets into the hands of the public.Read the rest at Rolling Stone | Taibblog
The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time – primarily with the retail giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks.
Last week, in response to an Overstock.com motion to unseal certain documents, the banks’ lawyers, apparently accidentally, filed an unredacted version of Overstock’s motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they’ve been fighting for years to keep sealed.
Accidentally Released - and Incredibly Embarrassing - Documents Show How Goldman et al Engaged in 'Naked Short Selling'
by Matt Taibbi
(h/t Yves Smith at Naked Capitalism)
Patrick Byrne has been fighting a lonely battle against "naked short selling." His website is well worth a long visit - Deep Capture - we are the red pill and his excellent presentation - Deep Capture the Movie also on vimeo
ReplyDeleteYes, Taibbi links to it at the end of his post.
ReplyDeleteIf you think naked short selling is problematic don't even look at naked derivative writing (an other sort of short selling for those not familiar with finances).
ReplyDeleteAnd that's not even illegal, so banks and dealers using lousy risk models can write infinite unfunded liabilities leveraging their capital hundreds of times. There are no real regulatory controls over this (most of it is totally unregulated anyway, in over the counter markets).
Recently BAC 'insured' a big part of his naked derivatives this with FDIC making Americans and the federal government fiduciary for all these short derivative positions. All the banks are big hedge funds disaster's waiting to happen, exactly a repeat of LTCM but just TBTS (too big to be saved).