goldman-sachs

Goldman Sachs Names New Managing Directors, Amid Wall Street Layoffs

by on November 18, 2011

Huffington Post…

Goldman Sachs Group Inc (GS.N) promoted 261 employees to managing directors this week, according to an internal memo sent this week, as the bank seeks to retain top talent amid a wave of layoffs across Wall Street. This year’s list represents a 19 percent drop from the 321 employees named managing director in 2010 and the lowest amount since 259 were promoted in 2008. The decline in promotions correlates with layoffs occurring at Goldman and most of its Wall Street competitors during a tough period for trading and investment banking revenue. Goldman’s overall workforce declined by 1,300 employees from June 30 to September 30 as the bank tries to wring out at least $1 billion in cost savings to protect its bottom line. During the quarter, Goldman lost $428 million, only the second quarterly loss in its 12 years as a public company, while revenue declined 60 percent from the year-ago period. Still, the bank is also working to retain talented young professionals, particularly in growth markets such as Asia and Latin America. In a presentation on Tuesday, Chief Executive Lloyd Blankfein said nearly 300,000 people applied to work at Goldman Sachs in 2010 and 2011 and the bank hired less than 4 percent of that pool. “Our commitment to attract talented professionals doesn’t end with recruiting,” said Blankfein. “We commit significant resources to their continued development.” Managing director is a coveted position among more junior Goldman employees and often takes years to achieve. The position is one level below partner managing directors, the most senior position at the firm and a relic from its days as a private Wall Street partnership. Blankfein said the average tenure of a managing director is about 12 years, while partners average 15.5 years at the bank. Goldman declined to comment on the promotion memo, which was sent on Wednesday. (Reporting by Lauren Tara LaCapra in New York; editing by Andre Grenon) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Goldman Sachs Names New Managing Directors, Amid Wall Street Layoffs

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Video: Hintz Says Goldman `Too Important’ for Criminal Charges

by on June 3, 2011

June 3 (Bloomberg) — Sanford C. Bernstein & Co. analyst Brad Hintz talks about the debate over criminally indicting Goldman Sachs Group Inc. Hintz talks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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Video: Hintz Says Goldman `Too Important’ for Criminal Charges

Chriss Street: Is America on the Verge of Another Credit Crisis?

June 3, 2011

Late yesterday afternoon the highly respected credit rating firm, Moody’s Investor Services, officially warned that if there is no imminent progress in Congress on the debt ceiling fight, the United States of America’s Aaa credit rating would be cut. Understanding that such a draconian event as a U.S. credit downgrade would infuriate voters, it should not come as any surprise that the media was distracted today over news that The Manhattan Attorney’s office happened to issue a subpoena to Goldman Sachs in regards to its role in the financial crisis. Goldman Sachs is the perfect scapegoat to blame for America’s credit woes. The firm is the largest investment bank in the world and its history of ethics violations are legendary. Goldman agreed to pay $550 million to settle Federal claims that it misled investors in a subprime mortgage product just as the housing market began to collapse. It was alleged that the company recommended to its individual, hedge funds, banks, and money manager clients that they make investments in sub-prime mortgages loans Goldman Sachs was betting were already failing. The settlement was among the largest in the 76-year history of the Securities and Exchange Commission, but it represented only a small financial hiccup for Goldman, which reported a profit of $13.39 billion for 2009, the worst period of the credit crisis. As the charts here show, Goldman Sachs has shown its appreciation to each of America’s political parties by donating handsomely to their elections success. As a show of appreciation, U.S. taxpayers have been very good to Goldman Sachs. When the credit crisis broke out in September 2008, the firm was allowed to borrow 84 times and at an interest rate of one hundredth of one percent for a total of over $18 billion dollars from the U.S. Federal Reserve in the first month of the crisis. Over the 18 months of crisis, Goldman Sachs was able to borrow an astounding total of $590 billion . Friends in high places are usually good to have, but with America’s credit rating going over the falls, operatives in both of our political parties are now busy tearing up Goldman business cards and will be soon returning some of those political contributions. Moody’s was very emphatic today that only a credible agreement on a substantial deficit reduction would support the United States maintaining the premier credit rating in the world. Although Moody’s stated that they had fully expected political wrangling prior to an increase in the statutory debt limit, “the degree of entrenchment into conflicting positions has exceeded expectations.” They went on to say that the “heightened polarization over the debt limit has increased the odds of a short-lived default.” Moody’s had previously indicated that its stable outlook on the triple A rating was based on the assumption that meaningful progress would be made within the next eighteen months in adopting measures to reverse the U.S. upward debt trajectory. Moody’s had assumed that the likelihood that significant progress would be achieved prior to the start of the 2012 election cycle. Moody’s is now unsure that “significant progress is possible in today’s political environment. The credit crisis of 2008 became visible with the bankruptcy filing of Lehman Brothers, but the mentality of crony companies being able to take outrageous risk with the confidence their friends in government will bail them out is a sad story that has been repeated for centuries. The problem is that eventually too much risk is taken and the taxpayers end up suffering extreme pain. Hopefully America will listen to Moody’s and make meaningful changes before having to suffer meaningful pain.

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Former GOP Senator Hired By Goldman Sachs

May 27, 2011

NEW YORK — With Goldman Sachs’ latest high-profile hire, the Wall Street giant is unlikely to shake its Government Sachs nickname or the reputation for exerting undue influence in Washington that it implies. Goldman announced Friday that it had named three-term Sen. Judd Gregg an international adviser to the bank. The New Hampshire Republican will “provide strategic advice to the firm and its clients, and assist in business development initiatives across our global franchise,” Goldman said in a statement. “Judd Gregg’s experience and insight will contribute significantly to our firm and our continuing focus on supporting economic growth,” said Lloyd Blankfein, Goldman’s chairman and CEO. “A strong financial sector is critical to our nation and one of the key engines of job creation in our country,” said Gregg, who was the ranking Republican on the Appropriations; Banking; Housing and Urban Affairs; and Health Education Labor and Pensions Committees. “I hope that I can bring to Goldman Sachs some ideas and perspectives that will help the firm continue to be a leader in supporting its clients in their pursuit of the capital, credit and advice they need to be successful.” In the wake of the financial crisis, which has been partly blamed on the excesses of Wall Street banks such as Goldman, Gregg was an outspoken critic of the Obama administration’s effort to tighten oversight of the financial industry. He was also a defender of Goldman during the heated congressional debate over the $700 billion bank bailout. Early last year, Gregg said that Democrats were overreacting to civil charges filed against Goldman for securities fraud by using the indictment to push regulatory reform. He noted at the time that the allegations had not yet been proven in court. “It’s really disingenuous for some people to pursue regulatory reform based off this one instance,” the retired senator said on MSNBC. “This is a single event, we don’t even know what the outcome will be.” During an April 2010 appearance on Fox News , Gregg corrected the host Greta Van Susteren’s assertion that Goldman received a $10 billion bailout. The bank didn’t need the money, and that it’s wrong to criticize them for handing out big bonuses, he said: VAN SUSTEREN: Goldman Sachs got bailed out, right? GREGG: They didn’t ask. I don’t think in Goldman’s case they were looking to be bailed out. VAN SUSTEREN: They took it, right? GREGG: They were told to. If you’re going to go back and do some history, what happened — I was there at the time. [Treasury Secretary] Hank Paulson called in the top 10 banks and said you are all going to take this money, because if only those of you who are in real trouble take the money it is going to be a message to the marketplace that you guys are in trouble and the others are stronger and that is going to turn the playing field against you and you are going to get in worse trouble. He said all the top 10 banks, you have to take this money there. So there were four or five who didn’t want to take it — Wells Fargo, Goldman, a number of others — but ended up having to take it. VAN SUSTEREN: So I’m wrong to think they got a bailout from taxpayers and turned around and paid big bonuses? I’m wrong in being sort of, like, hyper-critical of them? GREGG: In the Goldman case I think it is hard to say that. You can make that case with Bank of America because of the Merrill deal with Citibank, and with a couple of others that clearly got support when they were in difficult straits and then gave large bonuses.

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Video: Peabody Sees `Very Low’ Chance of Goldman Being Indicted: Video

May 27, 2011

May 27 (Bloomberg) — Charles Peabody, an analyst at Portales Partners LLC, talks about regulatory scrutiny facing Goldman Sachs Group Inc. and the outlook for the investment bank’s credit rating and the performance. Bonds of Goldman Sachs have lost 0.9 percent in May as Chairman and Chief Executive Officer Lloyd C. Blankfein faces criticism over business practices and a U.S. Senate report last month accused the firm of misleading clients. Peabody speaks with Deirdre Bolton on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Goldman Logs Most Banker Time on Schapiro’s Calendar

May 27, 2011

May 27 (Bloomberg) — Goldman Sachs Group Inc. officials were frequent guests during U.S. Securities and Exchange Commission Chairman Mary Schapiro’s first two years on the job. Schapiro had 10 meetings with Chairman and Chief Executive Officer Lloyd Blankfein, more than any other bank, according to her personal calendar for 2009 and 2010. The calendar information, posted without notice this week on the agency’s website, shows the dates, times and participants in meetings with Schapiro. Bloomberg’s Megan Hughes reports. (Source: Bloomberg)

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Video: Cohan Says Scrutiny on Goldman Is Like `Water Torture’

May 20, 2011

May 20 (Bloomberg) — William Cohan, author of “Money and Power: How Goldman Sachs Came to Rule the World” and a Bloomberg Television contributing editor, discusses Goldman Sachs Group Inc.’s public relations strategy and U.S. Senator Carl Levin’s report on the firm’s mortgage bets. Cohan speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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NY AG Wants Mortgage Records From 3 Major Banks

May 18, 2011

ALBANY, N.Y. — New York Attorney General Eric Schneiderman is seeking records from three major Wall Street banks as part of a broad investigation into the mortgage crisis that fueled the recession, an official familiar with the issue said Tuesday. Schneiderman is meeting with representatives of the Bank of America, Morgan Stanley and Goldman Sachs, according to the official, who spoke to The Associated Press on condition of anonymity. Those meetings are expected to focus on mortgage securities operations during the boom on Wall Street that ultimately cost banks billions of dollars. The official said securitization of those mortgages would be an area Schneiderman will examine. Packaging mortgages into securities that investors could buy might have concealed risky loans, something critics on Wall Street said was at the center of the mortgage crisis. The official spoke on the condition of anonymity because of the sensitivity of the continuing investigation. There was no immediate comment from the banks. There also was no immediate response to messages left at Schneiderman’s offices about the records search, which was first reported by The New York Times and the Wall Street Journal. The official told the AP that the records search is part of Schneiderman’s review of factors that led to the 2008 financial crisis. Back then, banks sold bundles of risky mortgages with teaser rates that increased after only a few years. Many borrowers ended up defaulting on the loans when the interest rates spiked. As a result, the value of mortgage securities plummeted. Experts in the area have since said that banks had very little of their own money invested in those mortgages. That led banks to take greater risks, which contributed to the fiscal crisis. ___ Associated Press Business Writer Pallavi Gogoi contributed to this report from New York City.

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Revenues Down At Biggest Investment Banks, Report Finds

May 17, 2011

Revenues at the world’s biggest investment banks fell 5 percent to $52 billion in the first quarter of 2011, hit by Middle Eastern unrest, natural disasters, volatile commodities and economic uncertainty, a consultancy said in a report on the industry. The survey of the world’s top 10 banks by London consultancy Coalition attributed much of the decline from a year earlier to an 11 percent slump in revenues from fixed income, the biggest contributor to the banks’ earnings. However, fixed income had ‘held up well’ given the macro challenges, the report said. The asset class was the dominant driver of revenues over the last four years and contributed $31 billion in the first three months of 2011. “Performance was impacted by political turmoil in the Middle East and North Africa, natural disasters in Asia, rising inflation and commodities prices, as well as ongoing concerns in Euro periphery countries. Unsurprisingly, therefore, fixed income was the weakest asset class,” the report said. Credit saw the biggest fall in its contribution to total fixed income revenue, down 4 percentage points to 20 percent. Emerging markets-related revenues in fixed income were 2 percentage points lower than a year ago at 15 percent, following over-valuation and soaring inflation concerns, the report said. The ‘origination’ business, which includes fees from mergers and acquisitions and debt and equity capital markets business, saw revenues of $10 billion in the quarter, one billion more than last year. M&A contributed an extra percentage point making up 26 percent of revenues, benefiting from ‘ongoing confidence in the global recovery.’ Debt capital markets remained the ‘primary driver’ with 47 percent of origination revenues due to ‘strong volumes’ of high yield issuance, particularly in the Americas. Equity capital markets were down 1 percentage point from a year earlier, at 27 percent. Coalition, an independent research firm for the investment banking industry, tracks Bank of America Merrill Lynch (BAC.N), Barclays (BARC.L), Citi (C.N), Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N), JP Morgan (JPM.N), Morgan Stanley (MS.N), Royal Bank of Scotland (RBS.L) and UBS (UBSN.VX). (Reporting by Cecilia Valente, Editing by Chris Vellacott and Jane Merriman) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Simon Johnson: Fear Companies Lurking In Dark Financial Shadows

May 17, 2011

On the face of it, Glencore International AG doesn’t look too scary. With about $80 billion in assets, the Swiss-based commodities trader is a lightweight in comparison to global megabanks like Goldman Sachs Group Inc. (GS), one of its trading rivals. Goldman has assets more than 10 times Glencore’s, is more leveraged and has less capital.

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Google Hits The Bond Market With Billion Dollar Sale

May 16, 2011

BRADENTON/NEW YORK, May 16 (Andrea Johnson and Danielle Robinson) – Google Inc hit the U.S. bond market on Monday with its high grade market debut, announcing a $3 billion sale of 3-year, 5-year and 10-year notes that will take advantage of low borrowing rates. Proceeds of the SEC-registered deal will be used to repay commercial paper and for general corporate purposes, the company said in a statement. Citigroup, Goldman Sachs and JP Morgan are joint lead managers on the deal, which garnered an Aa2 rating from Moody’s Investors Service, the third-highest rating in the agency’s scale. Google is one of the few large-cap technology companies to actually have debt on its balance sheet — albeit at about $2 billion of commercial paper, a tiny sum compared to its $169 billion market cap. The company is the latest in a spate of new or rare technology company borrowers coming to the corporate bond market this year, as they look to take advantage of low interest rates and realize that having some debt makes sense. “We are seeing some of the large cap tech companies deciding that having debt on the balance sheets is an appropriate way of having a capital structure and running a company, which is relatively new to them,” said one banker. “Generally most of these large cap tech companies have only used the debt markets to finance their acquisitions. They typically don’t use the debt markets for anything else.” Now, with rates so low and their own industries having reached a level of maturity, many are using the debt markets as a way of returning value to shareholders, at a time when they have large levels of cash trapped overseas. Microsoft, for instance, raised funds in the bond market in February in part to buy back shares, while Google is improving its debt profile by extending the maturity of its debt. Both have large levels of cash overseas. Cisco Systems in March sold $4 billion of three-year fixed and floating rate notes and six-year bonds; eBay in October last year sold $1.5 billion of three, five and 10 year notes. Google is planning to sell $1 billion of 3-year notes, that launched at 33 basis points over comparable Treasuries. The company will sell $1 billion of 5-year notes at 43 basis points over Treasuries and $1 billion of 10-year notes at 58 basis points over Treasuries. That compares with market “whispers” that put the 3-year in the mid 30s, the 5-year in the high 40s and the 10-year in the mid 60s. Pricing is expected later on Monday. At the guidance stage, sources heard book size on the deal was already up to $8-$9 billion, with sources originally hearing there was little chance of an increase. Google may grab the lowest coupon levels seen so far this year. The 2011 coupon to beat in 3-years is 1.25 percent, with both IBM and Colgate-Palmolive pricing deals with a 1.25 percent coupon. The 2011 coupon to beat in 5-years is 2.50 percent set by Microsoft on Feb 3. The 2011 coupon to beat in 10-years is 3.85 percent, set by Berkshire Hathaway’s Pacificorp last week. While at the lowest levels seen since December 2010, benchmark Treasury rates are still not in a spot which would allow any all-time low coupon records to be hit, with the all-time low coupon record in 3-years at 0.75 percent, in 5 years at 1.375 percent and in 10-years at 2.95 percent. Google’s strong debt protections measures are backed up by its almost $11 billion of operating profit and $7 billion of free cash flow for fiscal 2011, ended March, according to Moody’s Senior Vice President Richard Lane. The company also has nearly $37 billion in cash balances, he said. “These strengths, combined with solid business execution, will drive strong profitability, significant free cash flow generation, and ample financial flexibility,” Lane said. However, the company is facing challenges from well-funded rivals, including Microsoft, rated Aaa, and Apple, which is not rated, along with private companies such as Facebook, he said. “An additional rating constraint considers the still developing nature of Internet technologies, usage, and behavioral patterns, all of which pose challenges to constantly invest and innovate,” he said. (Reporting by IFR senior analysts Andrea Johnson and Danielle Robinson; Additional reporting by Reuters reporter Jennifer Saba; Editing by Ciara Linnane) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Video: Currie Sees Copper Price at $9,600 in Next Six Months

May 13, 2011

May 13 (Bloomberg) –- Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., talks about the outlook for commodities. He speaks with Maryam Nemazee on Bloomberg Television’s “Last Word.”

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Video: Tyler Sees `Enough Margin of Safety’ in Goldman Stock

May 13, 2011

May 13 (Bloomberg) — Jason Tyler, senior vice president at Ariel Investment LLC, discusses the outlook for Goldman Sachs Group Inc. a month after a Senate report said the firm misled clients. Tyler speaks with Erik Schatzker and Deirdre Bolton on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Brown Says Goldman Has `Big Bullseye On Its Back’

May 13, 2011

May 13 (Bloomberg) — Thomas Brown, chief executive officer at Second Curve Capital LLC and a Bloomberg Television contributing editor, discusses Goldman Sachs Group Inc.’s stock performance and outlook. The bank closed at its lowest level in more than eight months yesterday after Rochdale Securities LLC analyst Richard Bove told investors to sell the stock on fears the Department of Justice is being pressured to bring a criminal lawsuit against the firm. (Source: Bloomberg)

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Gramercy Facing Foreclosure Action on Nearly 900 Bank Properties

May 12, 2011

Gramercy Capital Corp. missed the scheduled maturity repayment of more than $790 million in loans, a default which will likely result in an attempt by the lenders to foreclose on nearly 900 properties, consisting mostly of bank branch offices, comprising 25.4 million rentable square feet, the company announced. The loans are pooled into two groups: $240.5 million mortgage loan with Goldman Sachs Mortgage Co., Citicorp North America Inc. and SL…

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John Cusack: Goldman Sachs Basically Is The Government

May 10, 2011

Add John Cusack to the list of celebrities unhappy with the supposed ties binding Wall Street and Washington. On Monday night, the actor, known for his roles in High Fidelity and Say Anything among others, used his personal Twitter account to take a couple shots at Goldman Sachs. (Hat tip to Business Insider.) The investment bank has come under fire after a Senate report found that Goldman, the fifth-largest U.S. bank by assets, profited from betting against clients after misleading them into buying financial instruments the bank knew to be junk. On Tuesday, Goldman Sachs said it had received word that regulators could officially bring charges against the bank. After Roget Ebert tweeted out an article on two U.S. Senators, Democrat Carl Levin and Republican Tom Coburn, formally asking the Justice Department and the Securities and Exchange Commission to investigate the investment bank for defrauding investors, Cusack replied, “wonder if its s sham..” Only minutes later, in response to other tweets insinuating that Goldman Sachs has “friends” in Washington, Cusack replied “they basicaly ARE the gov at this point lets be honest…” Cusack isn’t the first A-lister to criticize the supposed ties between Washington and Wall Street. In March, Oscar-winner Matt Damon said in an interview that he believed President Obama had “rolled over to Wall Street completely.” John Cusack tweets at @johncusack . Below are the tweets:

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Goldman Sachs Says Regulators Might Bring Fraud Charges

May 10, 2011

WASHINGTON — Goldman Sachs & Co. says one of its units is being investigated by federal regulators over whether it improperly used investment accounts to make trades and could face civil fraud charges. Goldman says the staff of the Commodity Futures Trading Commission has told the firm it will recommend that the agency file charges. The charges involve money belonging to customers of another financial firm that was a Goldman client. Goldman says in a filing with regulators that the charges would be based on allegations that it knew or should have known that the money belonged to customers of that firm rather than to the firm itself. Goldman says it is cooperating with the investigation. It didn’t name the client firm.

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Goldman Sachs CEO: I’m Not Stepping Down

May 6, 2011

JERSEY CITY, New Jersey (Lauren Tara LaCapra) – Goldman Sachs Group Inc Chairman and Chief Executive Lloyd Blankfein said he is not stepping down, despite media reports that he has plans to resign. Blankfein spoke to reporters after Goldman’s annual meeting in Jersey City, N.J., on Friday. The event included tough talk from activist shareholders on issues ranging from executive compensation to climate change to accusations from lawmakers and regulators that the company earns profits from betting against its clients. One well known shareholder, Evelyn Y. Davis, suggested at the start of the meeting that Blankfein should step down once the session was over. When asked by reporters why he wanted to stay, Blankfein quipped, “And give up all this?” At the meeting, all of Goldman’s directors were approved by more than 90 percent of shareholder votes, while proposals on more disclosure for executive compensation and political spending, among other issues, did not gain a majority of votes. The meeting was held at Goldman’s office tower in Jersey City rather than its new headquarters building across the Hudson River in Lower Manhattan. Employees moved into that more glamorous site, which cost Goldman $2.1 billion to build, last year. Goldman shares rose 0.4 percent to $150.95 in late-morning trade. The stock is down 10.2 percent this year, compared with a 6.2 percent decline for competitor Morgan Stanley and a 7.6 percent gain for the S&P 500 index. (Reporting by Lauren Tara LaCapra; editing by John Wallace) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: U.S. Probes Goldman Sachs Findings After Senate Referral

May 4, 2011

May 4 (Bloomberg) — U.S. senators formally referred to the Justice Department and the Securities and Exchange Commission an investigative report that found Goldman Sachs Group Inc. misled clients about mortgage-linked securities. Bloomberg’s Dominic Chu reports on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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The Worst Corporate Reputations In America

May 3, 2011

A company’s reputation is formed not only by the products it sells, but by the decisions it makes in times of crises. For some, that’s a good thing. For others, some present on this list, not so much. Using survey results, market research firm Harris Interactive has compiled a list of the U.S. companies with the best and worst reputations. For the 12th Annual Harris Interactive U.S. Reputation Quotient Survey roughly 30,000 Americans were asked to rate the 60 most visible companies in the United States based on six factors: financial performance, products and services, workplace environment, vision and leadership, social responsibility, and emotional appeal. Combining these factors, Harris tallied a total RQ Score. Scoring above 80, for reference, indicates a company’s reputation is “excellent.” Overall, companies in this year’s survey ranked higher than the previous year, with 16 companies rated as “excellent” compared to only six last year. Tech companies, in general, seem to have the best reputations, while financial and oil companies have the worst. Notorious scandals like the BP Gulf Oil Spill and Goldman Sachs’s role in the subprime crisis seem to have lingered in American minds, and companies with the worst reputations scored especially poorly when rated on whether they have “high ethical standards” and could be “trusted to do the right thing.” Car companies largely fell somewhere in the middle, but that could change in the coming years. General Motors and Chrysler, while stuck in the bottom 11 this year, did make the third and fourth highest gains on the list, respectively, of any company. Below are the 11 companies with the worst corporate reputations:

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Big Banks Sued For Helping To Bankrupt Home Loan Company

May 3, 2011

WILMINGTON, Delaware (Tom Hals) – The trustee for bankrupt Thornburg Mortgage Inc has sued Goldman Sachs, Barclays and other big banks for a combined $2.2 billion, blaming them for the former home loan company’s bankruptcy. The trustee filed four separate lawsuits, the most extensive of which blames a “collusive scheme” by units of JPMorgan Chase & Co, Citigroup, Royal Bank of Scotland, Credit Suisse and UBS for driving the company into bankruptcy. The trustee, Maryland lawyer Joel Sher, accused the five banks of acting together to use a series of unjustified margin calls to extend their control over Thornburg, which was once a leading provider of “jumbo” home loans. The lawsuit seeks to recover $2 billon for fraudulent conveyances and transfers by the banks, which had financed Thornburg’s mortgage-backed securities. The trustee said the banks eventually drove the Thornburg into Chapter 11 in May 2009. It sought protection from creditors with $36.5 billion in assets, making it one of the larger bankruptcies during the financial crisis. Citigroup and JPMorgan both said the lawsuit was meritless, and JPMorgan also said it would defend its Bear Stearns unit vigorously. Credit Suisse and UBS declined to comment. RBS did not immediately return a call for comment. Sher was appointed to run Thornburg after the company’s executives were accused of using Thornburg’s staff and offices, without creditors’ approval, to start a new company. The trustee also sued Barclays for improperly seizing mortgage bonds from Thornburg in 2007 by undervaluing the securities in a series of margin calls. The trustee is seeking at least $94 million. Barclays declined to comment. Sher sued Goldman Sachs, seeking at least $71 million and accused the bank of scheming to seize hundreds of millions of dollars of investment-grade mortgage bonds that Thornburg had pledged as collateral. Goldman Sachs declined to comment. The final lawsuit claims Countrywide Home Loans Inc, which was acquired by Bank of America, breached representations and warranties on the loans it sold to a unit of Thornburg. Bank of America declined to comment. That lawsuit was also brought on behalf of a group of investors known as the Zuni Investors LLC, who were represented by David Grais of Grais & Ellsworth. Grais has brought numerous “putback” lawsuits that seek to have originators such as Countrywide repurchase mortgages that fell short of promised standards but were packaged into mortgage-backed securities and sold as top-notch investments. Investors holding hundreds of billions of dollars of mortgage bonds have been hoping to shift their losses from the bonds back to the banks that packaged the bonds, but it has been a struggle. In part, that is because the loans are held in trusts that sold the mortgage bonds. The trustees overseeing the trusts have been reluctant to cooperate with investors and go after the originators of the loans, although that may be changing. The Thornburg putback lawsuit is based in part on a “joint prosecution agreement” between the mortgage bond trustee and the Zuni investors. Grais said it was the first lawsuit that he knew of that was based on such an agreement. Thornburg is now known as TMST Inc and the lawsuits were filed as part of the bankruptcy, which is In re TMST Inc U.S. Bankruptcy Court, District of Maryland, No. 09-17787. (Editing by Steve Orlofsky, Bernard Orr and Richard Chang) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Video: Goldman, JPMorgan Among Banks Facing EU Probe Over CDS

April 29, 2011

April 29 (Bloomberg) — Goldman Sachs Group Inc., JPMorgan Chase & Co. and other investment banks face a European Union antitrust probe into credit-default swaps for companies and sovereign debt. The European Commission said it will check whether 16 bank dealers colluded by giving market information to financial information provider Markit and also examine whether nine of the firms struck deals with ICE Clear Europe. Bloomberg’s Aoife White talks about the probe with Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Goldman Sachs’s Kostin Favors Technology, Energy Stocks

April 21, 2011

April 21 (Bloomberg) — David Kostin, chief U.S. equity strategist at Goldman Sachs Group Inc., discusses U.S. corporate earnings and investment strategy. Kostin speaks with Erik Schatzker and Deirdre Bolton on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Kos Cites `Struggling’ First-Quarter U.S. Bank Revenues

April 19, 2011

April 19 (Bloomberg) — Dino Kos, managing director at Hamiltonian Associates, talks about the performance of U.S. banks in the first quarter, business strategies of Goldman Sachs Group Inc. and JPMorgan Chase & Co., and yesterday’s decision by Standard & Poor’s to lower its outlook for the U.S. credit rating. Kos talks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Goldman Sachs Group Q1 Earnings

April 19, 2011

Goldman Sachs Group Q1 Earnings

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Goldman Sachs Group Q1 Earnings

April 19, 2011

Goldman Sachs Group Q1 Earnings

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Simon Johnson: Could Goldman Sachs Fail?

April 14, 2011

If Goldman Sachs were to hit a hypothetical financial rock, would they be allowed to fail — to go bankrupt as did Lehman — or would they and their creditors be bailed out? I asked this question on Sunday to four leading experts (Erik Berglof, Claudio Borio, Garry Schinasi, and Andrew Sheng) from various parts of the official sector at the Institute for New Economic Thinking (INET) Conference in Bretton Woods — and to a room full of people who are close to policy thinking both in the United States and in Europe.  In both the public interactions (for which you can review video here) and private conversations later, my interpretation of what was said and not said was unambiguous: Goldman Sachs would be bailed out (again).

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George Clooney Tackling Washington, Wall Street In New Film

April 14, 2011

George Clooney is set to produce — and perhaps direct — “700 Billion Man,” a new film about the 2008 financial crisis and the subsequent government bailout of troubled financial institutions, Variety reports . Clooney’s film will be based on a 2009 Washington Post feature on Neel Kashkari , the former Goldman Sachs executive who put together and helped administer the Troubled Asset Relief Program. A gloomy portrait of a man under pressure from the government, Wall Street, the media and the public at large, the article finds Kashkari in a cabin in Northern California, having resigned after putting the maligned package together. “We didn’t know if it would work. We had to project confidence, hold up the world. We couldn’t admit how scared we were, or how uncertain,” Kashkari says in the article. Clooney, a noted political activist, has taken on the financial crisis in film before. In 2009 he starred in “Up In The Air,” playing an executive charged with flying around the country and helping corporations downsize employees. He directed and starred in “Good Night, and Good Luck,” a feature about Edward R. Murrow’s takedown of Senator Joseph McCarthy, and won an Oscar for his role in Middle Eastern-focused “Syriana.” He’s now directing and starring in “The Ides of March,” playing a presidential candidate whose posters look exactly like those of then-candidate Obama’s in 2008. For more, click over to Variety .

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Video: Cohan Calls Goldman Embodiment of `Wall Street Shark’

April 8, 2011

April 8 (Bloomberg) — William Cohan, author of “House of Cards” and a Bloomberg Television contributing editor, talks about his new book. “Money and Power: How Goldman Sachs Came to Rule the World,” which chronicles the history of Goldman Sachs Group Inc. Erik Schatzker reports on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Joe Keefe: Saying "No" to All-Male Corporate Boards

April 6, 2011

Each year, we hear the latest, discouraging figures on the glacial progress women have made in cracking the male-dominated board rooms of corporate America. According to a recent Catalyst study, women hold only 3 percent of the CEO positions and 15 percent of the board positions among Fortune 500 companies. It is time to ask why progress has been so slow and what can be done differently to accelerate it. This failure is not due to lack of effort. Many well-motivated individuals and organizations have worked for years to alter this state of affairs, deploying a range of strategies aimed at encouraging companies to embrace gender diversity on their boards. There is also considerable evidence that the paucity of women on corporate boards and management teams is costing us, as numerous studies underscore the nexus between greater board and management diversity, on the one hand, and improved corporate governance and financial performance, on the other. When women are at the table, the discussion is richer, the decision-making process is better, management is more innovative and collaborative, and the organization is stronger. This is particularly the case with a critical mass of women in leadership roles. Moreover, the persistence of male-dominated boardrooms takes place against a backdrop of abysmal failures in corporate governance. The recent financial crisis is only the latest reminder that many boards of directors are simply not doing their job. And if this is true, then the old canard that “there aren’t enough qualified women” to fill more board seats can be turned on its head: After all, the (mostly) men who led so many of our largest financial institutions to ruin turn out not to have been very “qualified” either. But there is one indisputable fact about non-diverse boards that we never seem to acknowledge, perhaps because the truth hurts: we elect them. That’s right, even those of us who think that gender discrimination is wrong, and that women should be better represented in corporate board rooms — we elect these non-diverse boards, often unwittingly, year after year. How is that? Well, all publicly traded corporations send out a proxy ballot to their shareholders in advance of their annual general meeting, with a list of director nominees to serve on the company’s board. The shareholders — or at least those who vote — then ordinarily rubber stamp this list of director nominees, which means, in most cases, either no women or a slate of nominees where women are grossly underrepresented. Why do we rubber stamp all-male boards while we profess to believe that more diverse boards are needed? Because we either don’t vote our proxies at all or we assign them to someone else who votes them for us, sometimes contrary to our values and our interests. If we own stock directly, many of us simply throw away the proxy ballot when it arrives in the mail. If we invest in stocks or mutual funds through a broker or investment adviser, or invest in a 401(k) or 403(b) plan at work, or in an IRA, we generally assign responsibility for voting our proxies to an agent. In either case, we are these companies’ shareholders, and if we believe there needs to be greater gender diversity on corporate boards, then we need to start taking rather than abdicating responsibility. We need to become part of the solution rather than part of the problem. There is a simple way to do this. We can withhold support for all-male director slates, or instruct whoever is voting our proxies to withhold such support. If enough investors ask this of their investment advisers, or their retirement plan administrators at work, or their mutual fund managers, then we can begin to make a difference. In fact, if we each wrote a letter to the companies, and enclosed it with our proxy ballot, letting them know why we are saying “no” to their board, the companies we own would begin to get the picture. Companies will respond to investor pressure. They will listen to their shareholders if enough of us are willing to raise our voices. When it comes to increasing gender diversity on America’s corporate boards, the business case is clear. Companies — and their shareholders — will actually be better off. Let your voice be heard. Take the time to vote your proxies for greater gender equality. Jacki Zehner was the youngest woman, and first female trader, to be become a partner at Goldman Sachs and is Co-Chair of Women Moving Millions. Joe Keefe is the President and CEO of Pax World Funds.

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Goldman Sachs awards chairman USD14.12m

April 3, 2011

Goldman Sachs awards chairman USD14.12m

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Video: Ivry Says Goldman Borrowed From Fed Window Five Times

March 31, 2011

March 31 (Bloomberg) — Bloomberg reporter Bob Ivry discusses the release of the Federal Reserve’s discount-window lending records and Goldman Sachs Group Inc.’s borrowing history. He speaks with Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Goldman Tapped Fed’s Emergency Loan Program, Contrary To Exec’s Claims

March 31, 2011

Goldman Sachs Group Inc. (GS) tapped the Federal Reserve’s discount window at least five times since September 2008, according to central bank data that contradict an executive’s testimony last year.

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Witness: Accused Inside Trader Removed Office Records On Day Of Arrest

March 29, 2011

NEW YORK (By Grant McCool) – A former Galleon Group trader contends he saw a brother of accused hedge fund founder Raj Rajaratnam remove notebooks from their office on the day of Rajaratnam’s October 2009 arrest, according to trial documents. The claim, from ex-Galleon employee and government witness Adam Smith, emerged in court filings in the biggest Wall Street insider trading case in a generation, with the defense asking the judge to bar that portion of his expected testimony to the jury because it was prejudicial. “I’m leaning somewhat toward the defense position,” U.S. District Judge Richard Holwell said, but he reserved final decision until Tuesday. A federal prosecutor told the judge Smith would be called to begin his testimony on Tuesday. The trial resumed on Monday with a different government witness acknowledging that some information he says he gave Rajaratnam may have been wrong or subject to media or analysts’ speculation. “Whatever I had I passed on to him,” former Intel Corp executive Rajiv Goel, 52, told defense lawyer Terence Lynam about the chipmaker’s earnings and deal information in 2007 and 2008. “I don’t know whether it was right or not.” Sri Lankan-born Rajaratnam faces criminal charges of conspiracy and securities fraud. He has vowed to clear his name at trial, arguing his trades were based on research or publicly available information. The Manhattan federal court trial began on March 8 and could last two months. Goel and Smith are among 19 people who pleaded guilty in the Galleon case. Smith gave an interview to the FBI on February 1 in which he discussed documents taken from the Galleon office on the day Rajaratnam was arrested, according to court papers. Smith claimed in the interview that Rengan Rajaratnam spoke to him about the removal of the documents some time later “in a manner in which Smith interpreted to mean that ‘Rengan wanted to confirm (Smith) was not going to say anything about the notebooks,’” the court filings say. Prosecutors argued that “Smith’s observations are being offered to prove the existence of the charged conspiracy.” Rengan Rajaratnam, also a fund manager, has been described by prosecutors as an unindicted co-conspirator. Raj Rajaratnam’s lawyers said the documents retrieved by Rengan Rajaratnam reflected Raj Rajaratnam’s “charitable donations and real property holdings on the instructions of counsel” for a bail hearing after his arrest. Rajaratnam, 53, is accused of getting inside stock tips from highly placed friends and associates about companies, including Google Inc, Intel Corp and Goldman Sachs Group, between 2003 and 2009. On Monday, prosecutors also called Xilinx Inc. executive Rick Muscha to the witness stand. Prosecutors accuse Rajaratnam of conspiring with friend Kris Chellam to obtain non-public information about Xilinx earnings. The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184. (Reporting by Grant McCool; editing by Andre Grenon and Matthew Lewis) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Inside One Of Goldman Sachs’ Most Profitable Divisions

March 28, 2011

For Goldman Sachs Group Inc.’s Special Situations Group, disasters can be a source of some of the biggest profits. Now the secretive investing operation faces its own potential calamity.

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‘Oh, Dude, We’re F—–’: Insider Trading Trial Wiretaps Fascinate

March 28, 2011

NEW YORK — Jurors at a closely watched federal trial are learning that the high-stakes world of hedge funds sometimes sounded like this: “I need to get back to basics. I’m gonna become Mr. October.” “Yeah, I love that.” And: “Hey get me a job with one of your powerful friends, man. I’m tired of this company.” Also: “Oh dude, we’re f—–.” The recordings – some crude and silly, others complex and confusing, all allegedly illegal – are key evidence in the case against Raj Rajaratnam, the former hedge fund manager who before his arrest in 2009 made a fortune for himself and others with his mastery of the technology and other markets. Prosecutors say the calls, combined with the testimony of cooperators, pull back the curtain to reveal how Rajaratnam was cultivating friendships with cash, trading advice and family vacations while committing his crimes. The trial, which is entering its fourth week, has become a showcase for what prosecutors say is the stepped-up use of FBI wiretaps in white collar cases. Wall Street insiders “who are considering breaking the law will have to ask themselves one important question: Is law enforcement listening?” U.S. Attorney Preet Bharara warned when he announced the Rajaratnam case. The FBI was listening to Rajaratnam, founder of the Galleon Group, and a nefarious network of other fund managers and public company executives nonstop in 2008 before he was charged with earning more than $50 million illegally by trading on inside information – what prosecutors have billed as the largest hedge fund insider trading case ever. In his opening statement, defense attorney John Dowd insisted there was nothing incriminating about the calls, only “a lot of self-promotion and gibberish. … Just a lot of drama.” But the government says it was more than just trash talk. Prosecutors have twice played a tape of a July 29, 2008, telephone call in which Rajaratnam grills former Goldman Sachs board member Rajat Gupta about whether the board had discussed acquiring a commercial bank or an insurance company. “Have you heard anything along that line?” Rajaratnam asked Gupta. “Yeah,” Gupta responded, “This was a big discussion at the board meeting.” Prosecutors sought to maximize the impact of the Gupta tape last week by calling Goldman Sachs CEO Lloyd Blankfein to testify that the phone call violated the investment bank’s confidentiality policies. Gupta, who has not been charged, has denied any wrongdoing. The government also has played tapes of Rajaratnam it says proves he was trading secrets with fellow hedge fund manager Danielle Chiesi, who has pleaded guilty in the case. The two could be heard bantering like a loving couple, praising his prowess as “Mr. October,” calling him “baby” and signing off with an, “I love you.” One exchange mixes finance with flirtation. “I mean I think this stock could go up $10 you know? But we got to keep this radio silence,” Rajaratnam said. “Oh please. That is my pleasure,” Chiesi responded. “Not even to your little boyfriends, you know?” “No, believe me – I don’t have friends.” On another tape, Rajaratnam’s trader brother drops the F-bomb twice while prosecutors say he was fretting over a newspaper article he feared may have blown an inside transaction. “Can’t catch a break,” the brother says. The calls also reveal a cozy alliance between Rajaratnam and Rajiv Goel, a top Intel executive-turned-cooperator. Goel kicked off one conversation jokingly asking for Rajaratnam to get him a new job. In another, he said he was calling “just to say you’re a good man.” Rajaratnam later chuckled and responded, “You’re a good guy too. When I see you I’ll give you a kiss on the cheek.” During Goel’s testimony, he was pressed on cross-examination about whether he thought Rajaratnam was joking about kissing him. “I hope he was – otherwise I had him figured out all wrong,” he responded, drawing a rare moment of laughter in the courtroom. Both Goel and former financial consultant and admitted tipster Anil Kumar testified that they had vacationed with Rajaratnam. Kumar testified that Rajaratnam once paid him a secret $1 million bonus for a tip that earned $20 million in 2006. Kumar also described how Rajaratnam mixed business with pleasure: While the pair sat on deck chairs at the beach outside Rajaratnam’s Miami condo in 2009, he said, the hedge fund manager took a phone call on the beach with a tip that Cisco would be buying another company – information Kumar traded on using his laptop. Kumar testified that Rajaratnam then foreshadowed their arrests a week later by confiding that he had been told to be “really careful” because one of his former employees was wearing a wire. He advised Kumar to take precautions by using prepaid phones that would be hard for investigators to track. He said he was “really disappointed” when he learned of it. “I can’t believe he is doing that and betraying me,” Kumar quoted Rajaratnam as telling him.

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Robert Lenzner: Gold, Silver Prices Hit New Peaks on Political Unrest

March 24, 2011

Gold bullion closed at $1438 Wednesday after hitting $1442, and will rise as investors try to protect themselves in a world gone mad with chaos and blood. Silver actually hit a new 35 year peak at $37.19, and getting closer to the $40-$50 goal we set last fall. Gold is no longer just a hedge against QE2 and inflation — or a hedge against deflation. Nor is it a hedge against a declining dollar. Today, gold has become an expression of the instability spreading from Tunisia to Egypt to Libya to Syria, to Yemen, to Saudi Arabia, to Iran, to Bahrain — and those street dissensions to come, conceivably in Kuwait, UAE, and elsewhere. Oil supplies are threatened. Buy gold and silver. You don’t believe? Look at a chart of gold against silver. They are moving in absolute tandem now. Any Sheikh trying to preserve his fortune must own gold and silver. In the US the price of GLD, the largest gold ETF, hit a peak of $140 and looks set to breakthrough that mark tomorrow or the next day. Let’s see if net selling turns into net buying. Are you listening Soros and Paulson, and their camp followers? Then, there’s the WikiLeaks impact on gold and silver. The FT reported a few days ago, via cables released by WikiLeaks, that more central banks are plowing into gold, playing catch up with China, Russia and India. Listen up!. Iran, says the Bank of England via the FT , is making “a significant move… to purchase gold. Likewise, the Qatar Investment Authority, no slouches, and Jordan’s central bank are putting reserves into gold. I must call my friend at the Bank of Israel to find out what he’s doing. I’m sure I won’t get anywhere. Imagine; gold and silver at new peak prices. While oil is only at $106 — high for sure, and going higher in fits and starts, and copper has eased recently as the Chinese reduced their purchases. A shocking development. Goldman Sachs is still bullish.

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Goldman Sachs Chief Discusses His Work Habits On Witness Stand

March 23, 2011

Lloyd Blankfein, chief executive officer of Goldman Sachs Group Inc. (GS), checks his bank’s profit every day, prefers voice mail to e-mail and makes unscheduled calls to board members at times of market “uncertainty.” His testimony at the insider trading trial of Raj Rajaratnam was intended by prosecutors to show how one of those board members, Rajat Gupta, who served in 2007 and 2008, passed on information he learned from the board. Blankfein’s 3 1/2 hours on the witness stand today before a packed Manhattan federal courtroom also included a few questions about the CEO’s personal life.

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Video: Rifkin Sees `Modest’ Fallout for Goldman From Testimony

March 23, 2011

March 23 (Bloomberg) — Mark Rifkin, partner at Wolf Haldenstein Adler Freeman & Herz LLP, talks about the insider-trading trial of Galleon Group LLC co-founder Raj Rajaratnam and the implications for Goldman Sachs Group Inc. and the hedge fund industry. Goldman Sachs Chief Executive Officer Lloyd Blankfein testified that former Goldman board member Rajat Gupta violated the firm’s confidentiality policies by allegedly telling Rajaratnam about the firm’s earnings and strategic plans. Rifkin speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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Ex-Goldman Progammer Gets Big Sentence For Stealing Codes

March 19, 2011

(Reuters) – A former Goldman Sachs Group Inc (GS.N) computer programmer was sentenced to eight years in prison on Friday for stealing secret code used in the Wall Street bank’s valuable high-frequency trading system. Sergey Aleynikov, was arrested by the FBI and charged in July 2009 with copying and removing trading code from Goldman before taking a new job at Teza Technologies LLC, a high-frequency trading startup firm in Chicago. A onetime collegiate-level competitive ballroom dancer, Aleynikov, 41, was convicted of trade secrets theft and transporting stolen property across state lines on December 10 after a two-week long jury trial in Manhattan federal court. High-frequency, computer-driven trading has become an important and competitive business. The software codes that trade shares in milliseconds are closely guarded secrets. “I very much regret the foolish thing of downloading information,” the Russian-born father of three said at his sentencing on Friday. “Part of this information was proprietary to Goldman. I never meant to cause Goldman any harm or harm anyone at the bank.” Aleynikov’s words fell short of U.S. District Judge Denise Cote’s hopes for “an open and honest statement of responsibility” for his criminal conduct. “You did not do that,” said Cote, imposing a sentence of 97 months that was within the eight to 10 years recommended by the government. Cote also fined him $12,500. Aleynikov’s lawyer, Kevin Marino, had originally asked for a sentence of probation but in court on Friday he suggested two years was adequate for what he called Aleynikov’s “foolish, tragic, horrible, ridiculous mistake.” Aleynikov has the right to appeal the sentence. His defense lawyers have argued that the matter belonged in civil, not criminal court. U.S. prosecutor Joseph Facciponti said the stolen code was Aleynikov’s “golden ticket” to Teza and “he stood to make millions more” there than he did at the bank. Facciponti said Aleynikov spent several months planning his move, eventually transferring 500,000 lines of Goldman Sachs source code to an outside server. Cote had revoked the bail of Aleynikov, a dual citizen of the United States and Russia, on the grounds that there was a risk of him fleeing before sentencing. Throughout the trial and sentencing phase, many comparisons were made with a similar case in the same courthouse against a former Societe Generale (SOGN.PA) trader, Samarth Agrawal. The citizen of India was found guilty by a jury last November of stealing high-frequency trading code from the French bank before going to a new job. On February 28, a judge sentenced him to three years in prison and he will be deported when he completes his sentence. The case is USA v Aleynikov, U.S. District Court for the Southern District of New York, No. 10-00096. (Reporting by Grant McCool; Editing by Tim Dobbyn) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Goldman Sachs Buys Out Warren Buffett

March 18, 2011

OMAHA, Neb. — The Goldman Sachs Group Inc. said Friday it has received regulators’ permission to spend $5.65 billion to repurchase Berkshire Hathaway’s preferred shares in the banking giant. Goldman said the Federal Reserve has approved its plan to repay Warren Buffett’s company for the $5 billion investment it made at the height of the financial crisis in the fall of 2008. Goldman was eager to repay Berkshire because it had been paying 10 percent interest on the preferred shares, which translated into an annual expense of $500 million. “Berkshire Hathaway’s 2008 investment in Goldman Sachs was a major vote of confidence in our firm and we are very appreciative of it,” Goldman spokesman Stephen Cohen said. The repurchase will weigh down Goldman’s first-quarter earnings by $2.80 per share because it includes a one-time preferred dividend of about $1.65 billion. The Federal Reserve also approved Goldman’s overall capital spending plan for 2011, including the repurchase of common stock and a possible increase in the bank’s quarterly dividend. But Goldman did not announce any stock purchase or dividend plans on Friday. Goldman was one of a number of banks subjected to “stress tests” conducted by the Federal Reserve to see if their balance sheets were strong enough to weather another recession. On Friday, the Fed said it had completed those tests and expects that “some” banks will increase or resume dividend payments and buy back shares. The Fed did not reveal the names or number of banks that are expected to do so. Berkshire’s Goldman investment figures in a high profile insider trading trial because prosecutors say a former Goldman board member tipped off Galleon hedge fund founder Raj Rajaratnam about Berkshire’s investment before it was announced. The SEC said Rajaratnam directed his hedge fund, the Galleon Group, to buy 175,000 shares of Goldman stock within a minute of receiving the tip about Berkshire’s investment, enabling him to earn nearly $1 million in profit. Rajaratnam’s trial began earlier this week. He has denied wrongdoing. The former Goldman board member has also denied wrongdoing. Buffett did not immediately respond to a message Friday seeking comment, but he predicted in his annual letter to shareholders last month that Goldman would soon redeem the shares. Buffett has said that the $500 million dividend Goldman had been paying Berkshire broke down to nearly $16 a second, making every tick of the clock sound like music to his ears. But he said Goldman didn’t seem to like hearing its money tick away. Buffett told shareholders that Goldman’s decision to redeem shares – along with similar moves by Swiss Re and General Electric – will diminish Berkshire’s earning power because it will no long receive the special high dividends. Berkshire’s 50,000 preferred shares of common stock will be repurchased for $110,000 apiece on April 18 because Goldman was required to give 30 days notice. But Berkshire will continue to hold warrants to buy 43.5 million common Goldman shares at a price of $115 per share anytime before the fall of 2013. Earlier this week, Berkshire found a use for some of its cash when it announced a deal to pay $9 billion for specialty chemical company Lubrizol Corp. That deal, which includes $700 million in debt, is expected to close in the third quarter, if shareholders and regulators approve. Berkshire owns roughly 80 subsidiaries, including clothing, furniture, jewelry and corporate jet firms, but its insurance and utility businesses typically account for more than half of the company’s net income. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co. Berkshire has more than 260,000 employees worldwide but only 21 at its headquarters in Omaha.

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Video: Lawyers Say Gupta Tapes Not Enough for Galleon Charges

March 18, 2011

March 18 (Bloomberg) — A 2008 conversation between then-Goldman Sachs Group Inc. Director Rajat Gupta and Galleon Group LLC co-founder Raj Rajaratnam about the bank’s talks on buying Wachovia Corp. or AIG Inc. isn’t enough to support prosecuting Gupta for insider trading, several lawyers said. Bloomberg’s Erik Schatzker reports. (Source: Bloomberg)

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Goldman Sachs Considers Helping Russia Attract Foreign Capital

March 15, 2011

MOSCOW — President Dmitry Medvedev has held talks with Goldman Sachs chief Lloyd Blankfein about the bank’s possible participation in a direct investment fund the Kremlin is looking to create to attract foreign capital. The Kremlin said Blankfein visited Medvedev on Tuesday to discuss the idea of a fund, which Medvedev first raised at the World Economic Forum in Davos in January. There was no other information on the meeting, the size of the possible fund, or when it would be introduced. Goldman Sachs couldn’t be reached for comment. Russia suffers from chronic underinvestment, prompting its leaders to frequently advertise the country as a haven for foreign capital. Would-be investors regularly point to persistent corruption and impenetrable bureaucracy as reasons they look elsewhere.

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SEC Chair: We Didn’t Consider ‘Media Frenzy’ When Writing IPO Rules

March 15, 2011

WASHINGTON (By Sarah N. Lynch) – The U.S. Securities and Exchange Commission is reviewing the rules surrounding private securities trading and initial public offerings, SEC Chairman Mary Schapiro said on Tuesday. Speaking before a House of Representatives appropriations panel that oversees SEC funding, Schapiro indicated the agency is looking into two specific areas to determine if the rules are outdated and need some upgrades. One area involves rules determining when a company must go public and start filing periodic financial reports. The other area pertains to the rules on private placements and how firms can qualify for exemptions from registering their securities offerings with regulators. These issues have jumped into the spotlight as Wall Street banks and electronic markets offer investors a chance to buy and trade stakes in hot Internet companies such as Facebook and Twitter before they go public. The most high-profile example has been Goldman Sachs, which had planned to offer both U.S. and foreign investors a chance to own shares in Facebook through private placements. Goldman later said it would not sell the shares to U.S. investors, citing the intense media coverage of the deal. Schapiro said on Tuesday that Goldman feared the media attention might run afoul of rules that prohibit general solicitation to investors for private placements. When these rules were written, “nobody thought about media frenzy,” she said. (Reporting by Sarah N. Lynch; Editing by John Wallace) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: Goldman’s Blankfein May Testify at Rajaratnam Trial

March 4, 2011

March 4 (Bloomberg) — Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein agreed to be a prosecution witness in Galleon Group LLC co-founder Raj Rajaratnam’s insider trading trial next week, said a person briefed on the matter. Bloomberg’s Jon Erlichman report. (Source: Bloomberg)

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Video: Goldman’s Blankfein May Testify at Rajaratnam Trial

March 4, 2011

March 4 (Bloomberg) — Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein agreed to be a prosecution witness in Galleon Group LLC co-founder Raj Rajaratnam’s insider trading trial next week, said a person briefed on the matter. Bloomberg’s Jon Erlichman report. (Source: Bloomberg)

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Video: Hatzius Says Improving Economic Data May Signal Job Gain

March 4, 2011

March 4 (Bloomberg) — Jan Hatzius, chief U.S. economist at Goldman Sachs Group, talks about the outlook for the U.S. jobs market. Hatzius speaks with Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Hatzius Says Improving Economic Data May Signal Job Gain

March 4, 2011

March 4 (Bloomberg) — Jan Hatzius, chief U.S. economist at Goldman Sachs Group, talks about the outlook for the U.S. jobs market. Hatzius speaks with Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Goldman CEO Will Testify For Insider Trading Case

March 4, 2011

(Reuters) – Goldman Sachs Group (GS.N) Chief Executive Lloyd Blankfein has agreed to testify for the U.S. government at the upcoming trial of Galleon hedge fund founder Raj Rajaratnam, the Wall Street Journal reported, citing people familiar with the matter. The criminal trial of the Sri Lankan-born Rajaratnam, 53, is scheduled to start on March 8 in Manhattan federal court, part of what U.S. prosecutors call the biggest probe of insider trading at hedge funds. The long-running case took a new turn two days ago when the U.S. Securities and Exchange Commission charged former Goldman director Rajat Gupta with providing inside information to Rajaratnam. Gupta called the charges baseless. The U.S. government would use Blankfein to establish evidence linking information about Goldman that was shared among board members and executives with Gupta, the Journal said. Blankfein’s testimony would be used as a bridge establishing the origin of the tip allegedly provided by Gupta to Rajaratnam, who the government says traded on the information, the paper said. Goldman representatives were not immediately available for comment outside U.S. business hours. (Reporting by Soyoung Kim; Editing by Muralikumar Anantharaman) Copyright 2011 Thomson Reuters. Click for Restrictions .

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