The SEC alleges that one of the world's largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events."
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Last year at Goldman Sachs the bonus pool on was $16.2 billion. This amounts to an average of just under $500,000 per employee.
All that bonus money - Goldman gave its people, should be returned. If the charges by the SEC are true, Goldman did not earn their money honestly. They committed fraud.
They will need that bonus money for their legal problems, and hopefully they will have to pay back people who were cheated.
I think its clear there is too much manipulation, corruption and general screwing around with other peoples' money on Wall Street.
Bernie Maddoff ruined many lives. He went to jail. And his wife and family kept most of their fortune. This was not right. They all should have gone to jail, his wife, his sons, and his brother. They all knew what Bernie was up too, what he was doing. The SEC screwed up too. They failed to act on whistler blowers.
Time will tell if the SEC has a good case against Goldman.
Hedge funds - Selling short - Lack of insider disclosures all wrong. All risky business, huge profits and in the end, many investors get screwed.
Every one is free to make a profit. A big profit. But you have to do it legally. We are living among many, many cheaters. Investing has risks, but the deck is stacked against us. Its unfair, and many cases not legal. These cheats should not just be fined. They should go to jail.
I am a little investor. And I don't have a prayer. The odds are stacked against me and others. If Obama reform increases the tax rate on dividends and capital gains, and I am affected, I will sell my stock, and get into other kind of investments.
I cannot beat them. I cannot join them. So I will leave them.