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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    Phil's Favorites

    Correlations Nosedive!

    Correlations Nosedive!

    Courtesy of 

    Nick Colas, chief market strategist at Convergex, on the “curse of the correlations” starting to wash away in the wake of the election – which is what active stock pickers and traders have been yearning for during the last 8 years or so: 

    We have tracked the “Curse of Correlation” on a monthly basis since October 2009. The basics are simple: the average sector (tech, financials, utilities, etc) correlation to the S&P 500 has been 82.3% since we started looking at the data.  Other asset classes, such as Emerging Market and EAFE (Europe, Asia, Far East) developed economy equities have been in that same low-80% range.  High yield c...



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    Zero Hedge

    WTI Slides As US Oil Rig Count Spikes Most Since April 2014

    Courtesy of ZeroHedge. View original post here.

    For the 25th of the last 27 weeks, Baker Hughes reports the oil rig count rose this week. With the biggest rise (+21) since April 2014 to 498, the highest since January 2016.

    Signaling US shale production set to rise dramatically...

    ...

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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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    ValueWalk

    Cook & Bynum Quarterly Portfolio Update: Procter & Gamble Co Exit

    By VWArticles. Originally published at ValueWalk.

    Cook & Bynum portfolio update for the third quarter ended September 30, 2016; in which they discuss the the sale of the fund’s stake in Procter & Gamble.

    U.S. stock markets are at all-time highs after bouncing hard off of first quarter lows and zooming further ahead following the November election results. As of the end of November, the S&P 500 – after being down more than 10% on the year on February 11th – is now up almost 10% for the year and is extending the historically long bull market well into its eighth year. This updraft has been in the face of broadly disappointing corporate earnings for much of 2016. Climbing stock prices that coincide with stagnant or falling profits mean that valuations have been further stretched at a time when they were already well above long-term ...



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    Kimble Charting Solutions

    Stocks & Bonds testing 20-year inflection points, says Joe Friday!

    Courtesy of Chris Kimble.

    Below looks at the patterns on the S&P 500 and the Yield on the 10-year note (Inverted to look like bond prices), since the late 1980’s. A rare test of support and resistance by stocks and bonds, is in play right now!

    CLICK ON CHART TO ENLARGE

    The S&P 500, has remained inside of rising channel (1), for the majority of the past 20-years.

    The 10-year yield (Inverted) has remained inside of rising channel (2), for the major...



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    Market News

    News You Can Use From Phil's Stock World

     

    Financial Markets and Economy

    Uncertainty Looms as Triple-Leveraged Oil Bets Go Dark (The Wall Street Journal)

    Thursday is the final day of ordinary trading for a pair of popular exchange-traded products that deliver turbo-charged returns on the price of crude oil.

    China warns WTO members not to use non-market economy clause after December 11 (Reuters)

    China's Commerce Ministry said on Friday it would take "necessary measures" if World Trade Organization members continue to use a non-market economy clause in its to WTO deal to assess dumping duties against it after Dec. 11.

    ...



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    Members' Corner

    How To Poop At A Party?

    Courtesy of Nattering Naybob.

    Once again, it's "Toilet Thursday" or "Thursday in the Loo", so we follow up on Second Hand Stink with How to Poop At A Party. 

    This hilarious video demonstrates how to control the Shituation when needing to Poopulate at a gathering, in no uncertain terms. 

    We hope this recurring bathroom humor theme "shits" well with our readers. So please do relax, drop the cursor below, click and enjoy.

    ...

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    Chart School

    Dow Jones Gann Angle Update

    Courtesy of Read the Ticker.

    When the Dow Jones moves the media must have an explanation for it. However the insiders have the nod to what is going on.

    The media story so far is that since the TRUMP win, managers have been rotating their portfolios to represent TRUMP trends (lower taxes, go easy on the 'too big to fail' Wall Street banks, more jobs for Americans). Prior the election the stock market was set up for a HILLARY win, due to more of the same, status quo, FED support. But....

    Using Richard Ney logic, the short answer is, stocks were always going up and the election results do not matter nor would a higher 10 yr bond or lackluster fundamentals. The real story is the marke...

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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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    OpTrader

    Swing trading portfolio - week of December 5th, 2016

    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

    Largest US Bitcoin Exchange Is "Extremely Concerned" With IRS Crackdown Targeting Its Users

    Courtesy of ZeroHedge. View original post here.

    Last Thursday we reported that in a startling development seeking to breach the privacy veil of users of America's largest bitcoin exchange, the IRS filed court papers seeking a judicial order to serve a so-called “John Doe” summons on the San Francisco-based Bitcoin platform Coinbase.

    The government’s request is part of a bitcoin tax-evasion probe, and se...



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    Mapping The Market

    The Most Overlooked Trait of Investing Success

    Via Jean-Luc

    Good article on investing success:

    The Most Overlooked Trait of Investing Success

    By Morgan Housel

    There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

    Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...



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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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    FeedTheBull - Top Stock market and Finance Sites



    About Phil:

    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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