Saturday, April 24, 2010
Another shoe drops
I hesitate to say "the other shoe" because I don't really know how many feet a Vampire Squid has. The latest shoe should prove to be a problem for the execs at Goldmine Sachs. The shareholders are filing suits against management for failure to do what they were paid to do.
Goldman Sachs's CEO and other top officers are accused in a pair of shareholder lawsuits of lax oversight in deals involving risky mortage-backed securities that later went bad.Hopefully this will be the anvil to the SEC's hammer. If they try to avoid the SEC by saying they did not know what was happening, they play right into the shareholders suit that accuses the Blankfein Gang of not doing their job. Either way, Goldmine's reputation is shot and that was their most valuable asset.
The lawsuits filed Thursday in New York State Supreme Court name Lloyd Blankfein and the firm's entire board of directors as defendants...
The two suits, filed by shareholders Robert Rosinek and Morton Spiegel, accuse Blankfein and other officers of "systematic failure" over 3 1/2 years for not properly vetting 23 mortgage-linked deals at the center of the SEC suit. Those deals, called Abacus, led to $1 billion in losses.
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