jkjsooner
4/27/2010, 09:22 AM
Any securities lawyers out there?
Let's say the John Paulson / Goldman Sachs transactions/communications are exactly as reported/speculated. John Paulson had Goldman Sachs design CDO's with the specific intent that they would fail. They instructed GS to fill them with the worst mortgages out there. Then Paulson shorted those securities and made billions.
There is so much unethical there it's unbelievable. Anyone short of Ayn Rand disciples would consider this something that should be illegal if it is not.
Can you have insider trading charges on a CDO or does it have to be a company stock? Could it even be considered insider trading even if the prospectus lists the crap that is in the security (albeit on page 100)?
The fact is, even if others could have figured it out, it was much more clear to Paulson than anyone else.
Could Paulson be charged with fraud for defrauding GS clients even though Paulson doesn't work for GS? What about conspiracy charges?
In general, is it illegal to design a financial instrument to fail?
This is very troublesome on so many levels. If anyone ever doubted that the Wall Street insiders rig the game this should convince them that that is true.
Let's say the John Paulson / Goldman Sachs transactions/communications are exactly as reported/speculated. John Paulson had Goldman Sachs design CDO's with the specific intent that they would fail. They instructed GS to fill them with the worst mortgages out there. Then Paulson shorted those securities and made billions.
There is so much unethical there it's unbelievable. Anyone short of Ayn Rand disciples would consider this something that should be illegal if it is not.
Can you have insider trading charges on a CDO or does it have to be a company stock? Could it even be considered insider trading even if the prospectus lists the crap that is in the security (albeit on page 100)?
The fact is, even if others could have figured it out, it was much more clear to Paulson than anyone else.
Could Paulson be charged with fraud for defrauding GS clients even though Paulson doesn't work for GS? What about conspiracy charges?
In general, is it illegal to design a financial instrument to fail?
This is very troublesome on so many levels. If anyone ever doubted that the Wall Street insiders rig the game this should convince them that that is true.