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  • Goldman Pays $550 Million to Settle Fraud Case
    K Palm signed the S E C settlement on Wednesday though it was not announced until after markets closed on Thursday Officials said the timing was not affected by the Senate s approval of an overhaul of financial regulations Word that Goldman had settled the case began leaking about 30 minutes before the markets closed and appeared to please investors some analysts had expected a settlement by this Monday when Goldman which had been under pressure by shareholders to reach a settlement was expected to deliver a formal response to the commission s complaint We believe that this settlement is the right outcome for our firm our shareholders and our clients Goldman said in a written statement on Thursday When the commission filed its case in April Goldman took a notably defensive stance The bank had apparently been surprised that investigators did not warn its executives about the case and give them a chance to settle at that time Yet Goldman began holding settlement talks with the S E C immediately after the complaint was filed As the weeks and months dragged on Goldman executives heard concerns from clients and former executives Goldman was bound to face another round of questions from analysts next week when the bank is scheduled to report its earnings The settlement removes a significant problem looming over Goldman but it could still face other legal problems Though Goldman said that it understood the S E C was not planning to bring other cases the commission continues to investigate collateralized debt obligations like the Abacus security issued by Goldman and other banks and could still take action The Justice Department also had been reviewing the Abacus deal and the S E C could refer other findings to prosecutors Goldman faces private lawsuits related to multiple mortgage securities and to its decision not to tell its shareholders last year when it received formal notification that the S E C was investigating the Abacus deal Goldman played fast and loose in the Abacus deal misled its clients and got called on it today said Senator Carl M Levin a Michigan Democrat who led a separate Congressional investigation that examined the Abacus deal A key factor in the settlement is that Goldman acknowledges wrongdoing in addition to paying a fine and changing its practices Mr Levin said in a written statement I hope the Goldman settlement together with the new financial reform law which prohibits additional unethical practices and conflicts of interest signal an end to the abusive practices that contributed to the 2008 financial crisis and the beginning of needed Wall Street reforms The settlement announced on Thursday awaits approval by a federal judge Barbara S Jones in the Southern District of New York A year ago the S E C suffered a black eye when a different judge in that district rejected a settlement between the commission and Bank of America The commission settled with the bank later on after substantially increasing the fine Under the proposed

    Original URL path: http://www.911omissionreport.com/goldman_550mln.html (2016-02-14)
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  • Goldman Sachs cuts taxes to one percent by moving profits offshore
    their tax bill was 6 billion or 34 1 percent That represents a year over year drop of 33 1 percent Goldman attributed its lower tax rate to more tax credits as a percentage of earnings and changes in geographic earnings mix Tax accounting advisor Robert Willens told Bloomberg News the rate drop seems a little extreme I was definitely taken aback Willens told the business wire Clearly they have

    Original URL path: http://www.911omissionreport.com/goldman_sachs_offshore.html (2016-02-14)
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  • Goldman Sachs hires law firm to shut blogger's site
    including one entitled Does Goldman Sachs run the world However many of the posts relate to other Wall Street firms and issues According to Chadbourne Parke s letter dated April 8 the bank is rattled because the site violates several of Goldman Sachs intellectual property rights and also implies a relationship with the bank itself Unsurprisingly for a man who has conjoined the bank s name with the Number of the Beast although he jokingly points out that 666 was also the S P500 s bear market bottom Mr Morgan is unlikely to go down without a fight He claims he has followed all legal requirements to own and operate the website and that the header of the site clearly states that the content has not been approved by the bank On a special section of his blog entitled Goldman Sachs vs Mike Morgan he predicts that the fight will probably end up in court It s just another example of how a bully like Goldman Sachs tries to throw their weight around he writes Speaking to The Daily Telegraph Mr Morgan explained how he went through a similar battle with US homebuilder Lennar a few years ago after he

    Original URL path: http://www.911omissionreport.com/goldman_sachs_blogger.html (2016-02-14)
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  • Goldman Trading-Code Investment Put at Risk by Theft
    to question how they plan to accommodate every other breach she said Michael DuVally a spokesman for Goldman Sachs in New York declined to comment 750 000 Bail U S Magistrate Judge Mark Fox ordered Aleynikov who earned 400 000 a year to be held by on 750 000 bail after prosecutors claimed he posed a threat to the community Aleynikov planned to earn three times his salary by joining a startup company and engaging in high volume automated trading prosecutors said Aleynikov posted bail today and was released Aleynikov didn t speak at the hearing except to say that he understood the conditions of his bail Teza co founded by former Citadel trader Misha Malyshev said in an e mailed statement that it first learned of the allegations on July 5 and suspended Aleynikov without pay following an investigation The firm was not aware of the alleged misconduct and offered to cooperate with the government according to the statement Reverse Engineering Someone stealing that code is basically stealing the way that Goldman Sachs makes money in the equity marketplace said Larry Tabb founder of TABB Group a financial market research and advisory firm The more sophisticated market makers and Goldman is one of them spend significant amounts of money developing software that s extremely fast and can analyze different execution strategies so they can be the first one to make a decision Someone could use the code to implement the same strategies and maybe on certain stocks they can be faster and in effect take away money that would normally be Goldman s Tabb said today in a phone interview The second thing that they can do is actually analyze the code so that they know what Goldman s going to do before Goldman does it and kind of reverse engineer Goldman s strategies and make money basically at the expense of Goldman Wake Up Call Harvey Pitt former chairman of the U S Securities and Exchange Commission said proprietary electronic data poses significant risks for all financial institutions This is a wake up call to all financial institutions to review their security systems not just with respect to trading codes but with respect to all proprietary information said Pitt now chief executive officer of Kalorama Partners LLC in Washington Goldman appeared to have taken some steps to prevent the theft of its code Pitt said The real question is whether in light of this outrageous conduct on the part of one of its employees it should have taken more steps Pitt said Aleynikov spent four hours with a Federal Bureau of Investigation agent after his July 3 arrest Shroff said He told the agent that he d done nothing wrong authorized prosecutors to seize his personal computers and said he hadn t known the server he was using was in Germany she said 32 Megabits Only 32 of 1 024 megabits of the software code was transferred Shroff said It is not disseminated she said of the code

    Original URL path: http://www.911omissionreport.com/goldman_trading-code.html (2016-02-14)
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  • High Frequency Chicanery
    before them Saluzzi said Yes The answer is absolutely yes The exchanges supply you with the data giving you the flash order and if your fixed connection goes into their lines first you are disadvantaging the retail and institutional investor Frontloading is cheating pure and simple but rather than go after the big fish who run these enormous computerized skimming operations regulators have been rolling up rogue traders who abscond with the trading code Here s a blurp from wired com Monday s arrest of Samarth Agrawal 26 came nine months after a Goldman Sachs programmer was arrested on similar charges that he too stole his employers source code for software his employer used to make sophisticated high speed high volume stock and commodities trades The Securities and Exchange Commission is investigating the use of these programs that many believe give their users an unfair advantage over other traders Nevertheless stealing the code to these suspect programs remains illegal Second banker accused of stealing high frequency trading code wired com Right so stealing from stock cheats who are gaming the system is against the law Roger Today s market is configured in a way that the only reliable way to make money is by increasing volume and trading on myriad venues We re talking about gains of mere pennies per trade on zillions of trades The problem is that when there s a glitch in the system the high frequency bullyboys head for the exits taking an ocean of liquidity with them That leads to a flash crash like the one on May 6 when the markets tumbled nearly 1 000 points in a matter of minutes And there s nothing to prevent a similar cataclysm from taking place in the future because nothing s changed The SEC still has

    Original URL path: http://www.911omissionreport.com/high_frequency_chicanery.html (2016-02-14)
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  • Overstock.com Announces Court Declines to Seal Evidence in Goldman Sachs/Merrill Lynch Case
    intervened in the case and joined Overstock com in opposing Goldman and Merrill s motion to seal the evidence Overstock com officials acknowledged that Goldman and Merrill will likely appeal to try to keep the evidence sealed but expressed confidence in the correctness of the court s ruling and that the decision will be upheld on appeal On January 10 2012 Overstock com announced that the court granted a summary judgment motion in favor of the defendants ruling that the conduct at issue in the case did not take place in California as required under California law The company believes the summary judgment ruling was error and is appealing At the summary judgment hearing counsel for Overstock com reviewed Defendant s extensive in California conduct showing a large percentage of the trades that were part of the manipulative scheme were effected on the Pacific Coast Stock Exchange which was located in San Francisco Merrill Lynch Professional Clearing Corporation s San Francisco office played a significant role in the fraud and that Goldman Sachs concertedly purchased a type of conversion trades that were part of the manipulative scheme which were cleared by Merrill Lynch Professional Clearing Corporation in San Francisco and were effected on the Pacific Coast Stock Exchange Counsel also laid out for the court the evidence to support the stock manipulation claim evidence that yesterday the court refused to seal Ultimately despite defendants sanding the gears with the summary judgment we will win this case Byrne said It will be a hard fight but we will prevail first on appeal and then at trial Almost as important to us as a trial victory is the fact that now the public will know about Goldman and Merrill s conduct About Overstock com Overstock com is a technology based retail company

    Original URL path: http://www.911omissionreport.com/overstock.html (2016-02-14)
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  • High-Frequency Firms Triple Trades in Rout
    making and statistical arbitrage and tactics based on momentum It accounted for about 53 percent of trading earlier this year down from 61 percent in 2009 according to Tabb Group LLC a New York based financial industry research firm In 2006 it was 26 percent of the market Tabb said Wedbush estimated the firms have made up 75 percent of American equity volume in August They have boosted trading in shares of Apple Inc AAPL Google Inc Bank of America Corp and Goldman Sachs Group Inc since early July after reducing business the first half of 2011 Wedbush said The traders are active in the SPDR S P 500 ETF Trust iShares Russell 2000 Index Fund and other exchange traded funds he said Regulatory Probe U S prosecutors have joined a regulatory investigation into whether some high speed traders are manipulating markets by posting and immediately canceling waves of rapid fire orders two officials said in April Justice Department investigators are working with the SEC to review practices that are potentially manipulative according to Marc Berger chief of the Securities and Commodities Task Force at the U S Attorney s Office for the Southern District of New York Algorithms or strategies that execute bigger orders by breaking them into smaller pieces and sending them to different exchanges also use high frequency techniques Mutual pension and hedge funds employ algorithms built by brokers or vendors to automate some of their trading instead of manually placing orders in markets or turning to humans to buy or sell blocks Wedbush said professionals who add bids and offers on exchanges make trading more efficient and reduce the cost to investors of buying and selling shares Adding Liquidity The bulk of high frequency traders are adding liquidity to the marketplace Wedbush said Automated traders employ a myriad of strategies that seek to profit from a stock s short term volatility but the mass of HFT is adding liquidity by being on both sides of the market or doing creation redemption arbitrage for ETFs Authorized brokers can buy the stocks in an index and swap them for shares in an ETF based on the benchmark or sell ETF units and get shares of its companies That reduces price differences between an ETF and the index on which it s based High frequency firms generally focus on the most active securities with about 80 percent of their trading limited to the 20 percent that are the most popular Wedbush said The S P 500 climbed 0 7 percent at 10 31 a m in New York today after the gauge surged 4 6 percent to 1 172 64 yesterday The index had plunged as much as 18 percent from its 2011 high and traded at 12 3 times reported earnings on Aug 10 the lowest valuation since March 2009 according to data compiled by Bloomberg Dow Jones Industrial Average futures rose 28 points or 0 3 percent to 11 112 today 63 of Volume Tim Quast founder

    Original URL path: http://www.911omissionreport.com/hft_tripple_trades.html (2016-02-14)
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  • The $300m cable that will save traders milliseconds
    the 1990s when telecoms infrastructure firms rushed to criss cross the ocean The laying of the new transatlantic communications cable is a viable proposition because Hibernia Atlantic the company behind it is planning to sell a special superfast bandwidth that will have hyper competitive trading firms and banks in the City of London and New York queuing to use it In fact it is predicted they will pay about 50 times as much to link up via the Hibernian Express than they do via existing transatlantic cables The current leader Global Crossing s AC 1 cable offers transatlantic connection in 65 milliseconds The Hibernian Express will shave six milliseconds off that time Of course verifiable figures are elusive and estimates vary wildly but it is claimed that a one millisecond advantage could be worth up to 100m 63m a year to the bottom line of a large hedge fund Some City experts have criticised the growth in vast volumes of electronic trading where computers automatically buy and sell stocks with no human input The British firm laying the cable Global Marine Systems is plotting a new route that is shorter than any previously taken by a transatlantic cable As closely

    Original URL path: http://www.911omissionreport.com/300m_cable.html (2016-02-14)
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