Posts Tagged ‘shareholders’

Goldman Sachs Settlement with SEC Ignores Company’s Duty to Provide Timely Disclosures to Shareholders about Investigation Leading up to Litigation

Sam Antar makes a good point here.  Looking out for shareholders was not the objective of the lawsuit brought by the SEC against Goldman Sachs. Whether it would have, should have, or could have been considered is another matter, and apparently not going to be addressed.  What we have here (and seemingly everywhere within our financial system) is not a real operation of law, but more of a political sideshow.  - Ilene 

Goldman Sachs Settlement with SEC Ignores Company’s Duty to Provide Timely Disclosures to Shareholders about Investigation Leading up to Litigation

Courtesy of Sam Antar of White Collar Fraud 

The Securities and Exchange Commission’s settlement of a lawsuit against Goldman Sachs (NYSE: GS) over a certain subprime mortgage product sold to investors misses a key issue concerning the company’s duty to provide timely and transparent disclosures to its own shareholders about government subpoenas, investigations, and pending enforcement actions against the firm. In this particular case, Goldman did not make timely disclosures about the regulator’s investigation and pending lawsuit against the firm, right under the SEC investigator’s noses.

Goldman Sachs chooses to keep shareholders in the dark about SEC investigation and pending enforcement action

During the summer of 2008, the SEC started investigating Goldman’s marketing of a certain subprime mortgage product, known as ABACUS CDO, to investors who lost over $1 billion from that transaction.
At that time, Goldman Sachs knew that the SEC was investigating its failure to disclose material information to investors in violation of SEC Rule 10b-5 in connection with that transaction. However, Goldman Sachs did not disclose the SEC’s investigation in its financial reports.

In July 2009, the SEC sent Goldman Sachs a Wells notice informing Goldman of its intention to file a lawsuit against the company. Still, Goldman Sachs chose not to disclose the SEC’s pending enforcement action in its financial reports.

On Friday, April 16, 2010, the SEC filed a surprise lawsuit against Goldman Sachs and Executive Director Fabrice Tourre alleging securities fraud in connected with the company’s marketing of the ABACUS CDO to investors. That day, Goldman Sachs shares plummeted from $183.31 per share to $160.30 per share or about 13%, wiping out about $12 billion of shareholder wealth.

Clearly, investors deemed the surprise news of the SEC complaint against the company as material information, unlike the management team running Goldman Sachs.

Goldman Sachs settles SEC charges

Yesterday, Goldman Sachs settled SEC charges…
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Greed’s Not Good For Shareholders

Greed’s Not Good For Shareholders

greedCourtesy of Tim at The Psy-Fi Blog 

Don’t Aim to Maximise Shareholder Value

When we look at the genuinely successful business people of our time, that happy band of folks who’ve created true shareholder value, enriching themselves and their followers to an astonishing degree, we find an extraordinary thing. The vast majority of these people are not particularly interested in money and their companies are generally not dedicated to some New Age declaration of shareholder value maximisation.

Greed is not a quality that seems to drive the world’s greatest creators of shareholder value and creating shareholder value is not the aim of the companies that are best at it. In fact we can pretty much guarantee the alternative: wherever you find over-rewarded executives presiding over companies whose main aim is to increase their market capitalisation we should pick up our skirts and get the hell out of it. Corporate greed is bad for ordinary shareholders.

Buffett’s Army

If you read Warren Buffett’s shareholder letters, for instance, you can’t help but notice that the people whose companies he takes over all, by and large, continue to work for him despite being made rich beyond the dreams of our avarice. They tap-dance to the workplace everyday and lead their companies through a set of values far removed from the value enhancing conceits of management consultants.

What seems to set aside great business people and their businesses from the pond life that mainly occupies executive positions is that they focus on things other than making money. These generally involve doing stuff that people actually want to pay good cash for, rather than an obsession with growth. Indeed, the last thing we should want is running our companies is people who are greedy for money, since the opportunities for unscrupulous executives to cheat us shareholders are huge.

Welch on Shareholder Value

The dangers of the concept of shareholder value are outlined by Jacques Reland who quotes Jack Welch with approval:

“On the face of it Shareholder Value is the dumbest idea in the world. Shareholder Value is a result, not a strategy. Your main constituencies are your employees, your customers and your products”

Welch, of course, was the man behind the elevation of shareholder value to cult status in his time as CEO of General Electric, so this looks like…
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10 Things You Need To Know That Are Going On This Weekend

SPECIAL EDITION: 10 Things You Need To Know That Are Going On This Weekend

Courtesy of Joe Weisenthal, at Clusterstock 

It’s a Saturday, but it certainly doesn’t feel like it, because there’s a heck of a lot going on. 

Here’s what you need to be paying attention to this May Day.

  • Greece/IMF/EU talks continue. According to Greek government officials, some kind of announcement may be made today. The market is hoping to hear something that’s orders of magnitude stronger than any bailout announcement we’ve gotten so far, or otherwise the feeling will be that it can and will fall through again.
  • Of course, there are fresh violent, anti-austerity protests going on today in Athens. The fact that it’s May Day, a day for celebrating anti-capitalism only adds to the tension.
  • New reports suggest the criminal probe into Goldman Sachs is not just a perfunctory follow-on to the SEC charges, but rather a truly separate thing that’s wider than Abacus, and that started before the SEC’s investigation. HUGE.
  • With just five days before the election, UK’s The Guardian has endorsed the Liberal Democrats, the country’s biggest third party. Its leader, Nick Clegg, has surged thanks to a string of strong debate performances, Gordon Brown’s disastrous campaigning, and a lingering sense of unease with the conservatives.


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    ValueWalk

    This Emerging Global Trend Just Hit The World's #2 Lithium Producer

    By PiercePoints. Originally published at ValueWalk.

    The “value added” craze has been sweeping the mining world. With governments from Zimbabwe to Indonesia calling for miners to upgrade copper, nickel, aluminum and platinum in-country — rather than exporting lower-value mineral concentrates.

    And this week, the world’s second-largest lithium nation jumped on the bandwagon. Calling for increased processing of lithium in the country, and offering financial incentives for those who help.

    By Dnn87 (Self-photographed) [GFDL or CC BY 3.0], ...

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    Zero Hedge

    "Trump Is Going To Fail" - Soros Speaks Live In Davos

    Courtesy of ZeroHedge. View original post here.

    In an breakout session, George Soros is again speaking in Davos, discussing items such as the fate of Europe, markets, regulation and of course, Trump, saying that he is convinced "Trump is going to fail" Here are the highlights so far:

    • SOROS: CONVINCED TRUMP WITH FAIL BECAUSE IDEAS CONTRADICTORY
    • SOROS: SAYS HAS CALLED TRUMP A CON MAN AND WOULD-BE DICTATOR
    • SOROS: TRUMP WILL DIVIDE AMERICA, HE OPPOSES THOSE WHO DISAGREE
    • SOROS: TRUMP IS GEARING UP FOR A TRADE WAR
    • SOROS: CAN'T PREDICT HOW TRUMP WILL ACT, TRUMP DOESN'T KNOW...


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    Phil's Favorites

    Investment Bank Analysts Are Clueless and Incompetent (Video)

    Courtesy of EconMatters

    We discuss why Investment Bank Analysts should never be listened to regarding any stock recommendations from the buy or sell side perspective, they join the long list of incompetency that is anybody still working at an I-Bank these days. The XOM Stock Downgrade is just a little late, about a month behind the market!

    ...

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    Market News

    News You Can Use From Phil's Stock World

     

    Financial Markets and Economy

    Oil, Snow and Saudi Billions: Secret Davos Gets Down to Business (Bloomberg)

    Nothing sharpens the mind of Davos delegates more than the prospect of striking big deals -- and after a day of debating globalization and its discontents it was time to go for the biggest one of all.

    Oil Gains as U.S. Stockpiles Fall While IEA Sees OPEC Cutting (Bloomberg)

    Oil recovered after the biggest drop in more than a week as industry data showed U.S. crude stockpiles declined, while OPEC and other producing nations trim output to ease a ...



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    Kimble Charting Solutions

    Will it be different this time for stocks and bonds?

    Courtesy of Chris Kimble.

    My mentor Sir John Templeton (founder of the Templeton Funds) used to share that the four most dangerous words in investing are; “It’s Different This Time!” 

    Below looks at long term charts on the S&P 500 and the yield on the 10-year note (inverted to look like bond prices).

    CLICK ON CHART TO ENLARGE

    ...

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    Members' Corner

    NFL 2016 Playoffs Championship Sunday

    Courtesy of Nattering Naybob.

    Following up on our Divisional Playoff projections, all match up stats in Yards Per Attempt, provided by Pro Football Reference.  All times Eastern.

    From our Wildcard Weekend projections...
    As they are both hotter than a squirrel putting suntan oil on his nuts, keep your eyes on these dark horses...In the NFC, watch the GB Sausage Packers, the potential of facing Mr. Rodgers and his O-line has the DAL Pokes (aka Jerry's Kids) defensive coordinator sweatin like a priest at a preschool.In the AFC, watch the Three Ri...

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    Chart School

    Russell 2000 Breaks Lower

    Courtesy of Declan.

    In the end, it was Theresa May and not Trump which saw the Russell 2000 cut through support and confirm the earlier 'bull trap'.  This change coincided with a 'sell' trigger in +DI/-DI. Only stochastics are hanging on to its 'buy' signal.


    The S&P experienced heavier volume distribution, but there wasn't a big percentage loss, nor was there a break from the consolidation range

    ...

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    OpTrader

    Swing trading portfolio - week of January 16th, 2017

    Reminder: OpTrader is available to chat with Members, comments are found below each post.

     

    This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

    We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

    Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

    To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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    Digital Currencies

    China's Bitcoin Exchanges Suspend Margin Trading

    Courtesy of Zero Hedge

    China's bitcoin traders who use the most popular bitcoin exchange not only in China, but also the entire world, BTCChina, were met with an unexpected warning on Friday:

    Starting from January 12th, 2017, BTCChina has suspended margin loan service. If you have any questions, please contact Customer Service: support@btcc.com.

    BTCChina, which commands over 37% of global bitcoin trading...

    ... wasn't alone.

    Fo...



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    Mapping The Market

    If we try it enough, it will work.

    Via Jean-Luc

    Brownback wants Trump to emulate what he did in Kansas because it worked so well:

    Sam Brownback Calls on Donald Trump to Mimic His Kansas Tax Plan

    By RICHARD RUBIN and  WILL CONNORS

    Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.

    In 2013, Mr. Brownback set out to create a lean, business-friendly government in his state that other Republicans could replicate. He now faces a $350 million deficit when the Kansas legislature convenes in January and projections of a larger one in 2018. The state’s economy is flat and his party is fractured...

    ...

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    Biotech

    The Medicines Company: Insider Buying

    Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

    I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

     

     

     

    Insider transaction table and buying vs. selling graphic above from insidercow.com.

    Chart below from Yahoo.com

    ...

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    Promotions

    Phil's Stock World's Las Vegas Conference!

     

    Come join us for the Phil's Stock World's Conference in Las Vegas!

    Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017.            

    Beginning Time:  8:00 am Sunday morning

    Location: Caesar's Palace in Las Vegas

    Notes

    Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

    The more people who sign up,...



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    All About Trends

    Mid-Day Update

    Reminder: Harlan is available to chat with Members, comments are found below each post.

    Click here for the full report.




    To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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    Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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    Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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