 The Wild Wild World of Wealth |  |
Yesterday, Goldman Sachs settled fraud charges associated with Abacus CDOs for $550 million. Not surprisingly, the settlement excluded Fabrice P. Tourre, who will no doubt be hung out to dry as the Tourre de Toxic winds to a close.
Personally, I think the government just got pimp-slapped. Here are five reasons why:
The news is out. US prosecutors are investigating several Morgan Stanley CDOs. Like the Abacus inquiry at Goldman Sachs, the issue is what representations Morgan Stanley made to clients. How did the bank market those Weapons of Money Destruction? Here’s what The Wall Street Journal reports:
Among the deals that have been scrutinized are two named after U.S. Presidents James Buchanan and Andrew Jackson, a person familiar with the matter said. Morgan Stanley helped design the deals and bet against them but didn’t market them to clients. Traders called them the “Dead Presidents” deals.
So without further ado, I’d like to play a little song for my friends from Morgan Stanley. I give you Little Walter and Dead Presidents:
Earlier this week, I described the Magnetar Trade—the idea that a hedge fund can promote a CDO and bet against the same pool of assets. I have no idea whether the SEC’s charges involve Magnetar, but one thing is clear even now.
Other law suits will follow.
We’ve all heard about what Government should do to strengthen the financial industry but what about bankers themselves? If Wall Street is serious about maintaining leadership in global finance over the long term, banks could already be implementing smart changes to enable just that. Here’s what Wall Street can do right now to regain its credibility—without waiting for Washington.
On Thursday, April 15, Anna Bernasek will guest blog on Acrimoney. Her post—Top 5 Ways for Wall Street to Regain Trust—is timely to say the least. Make sure to check back and see what Anna means when she advises banks:
“Eat your own cooking.”
I just watched the 60 Minutes segment on Michael Lewis and his new book, “The Big Short.” He had some terrific sound bites including my favorite about AIG: “…they didn’t know the mistake they were making.” Here’s one reason I’m buying the book. Watch CBS News Videos Online As a stockbroker, I was wary of [...]
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