Posts Tagged ‘Robert Khuzami’

Circle Jerk 101: The SEC’s Robert Khuzami Oversaw Deutsche Bank's CDO, Has Recused Himself Of DB-Related Matters

Courtesy of Tyler Durden

The incest continues: the WSJ has informed that the SEC’s chief investigator, Robert Khuzami, used to be general counsel for Deutsche Bank, and presumably reviewed numerous CDO-related transaction, while on the "other side" of the wall. "As part of that job, he worked with lawyers who advised on the CDOs issued by the German bank and how details about them should be disclosed to investors. The group included more than 100 lawyers who also defended the bank against lawsuits and vetted other financial products, these people said." The good: he probably knows more about CDOs than any other person in government administration history, and thus would not have brought on the Goldman case without being aware of all the potential tripwire nuances (and yes, if the Goldman case gets to the discovery stage, which it will, it is game over for Goldman’s defense strategy, which means settlement and/or much worse). The bad: who knows how many Deustche Bank CDO’s of comparable or worse nature he allowed to see the light of day. The most interesting: "Because of Mr. Khuzami’s old job and his financial interest in the company, he has recused himself from any matters related to Deutsche Bank, according to an SEC spokesman." With Greg Lippmann’s (legendary head of CDO trading at the German firm whose assets are greater than all of Germany’s GDP) recent sudden departure, and the SEC being prevented from bringing CDO-related charges against the bank (for the time being), is DB currently actively cleaning up its tracks? After all the firm was one of the top 3 CDO issuers in the period under consideration.

From the WSJ

SEC officials say Mr. Khuzami’s résumé is a nonissue, adding that the agency will go after illegal conduct wherever it occurs. "The Commission’s recusal policy prevents even the appearance of a possible conflict of interest by prohibiting employees from working on particular matters that could affect their financial interests," said SEC spokesman John Nester. Mr. Khuzami declined to comment through the spokesman.

Mr. Khuzami has vowed to pursue wrongdoing against Wall Street firms in high-profile areas such as subprime mortgages and CDOs. That mission created shockwaves last week when the SEC accused the world’s most profitable securities firm of duping investors in its sale of a CDO called Abacus 2007-AC1.

Goldman denies any wrongdoing, but Wall Street and Washington


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10 Things You Don’t Know (or were misinformed) About the GS Case

10 Things You Don’t Know (or were misinformed) About the GS Case

goldman sachs, squid By Barry Ritholtz at The Big Picture 

I have been watching with a mixture of awe and dismay some of the really bad analysis, sloppy reporting, and just unsupported commentary about the GS case.

I put together this list based on what I know as a lawyer, a market observer, a quant and someone with contacts within the SEC. (Note: This represents my opinions, and no one elses).

Ten Things You Don’t Know (or were misinformed by the Media) About the GS Case

1. This is a Weak Case:  Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no brainer. The rest is gravy.

2. Robert Khuzami is a bad ass, no-nonsense, thorough, award winning Prosecutor:  This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award (1996), for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.”

When you prosecute mass murderers who use guns and bombs and threaten your life, and you kick their asses anyway, you ain’t afraid of a group of billionaire bankers and their spreadsheets. He is the shit. My advice to anyone on Wall Street in his crosshairs: If you are indicted in a case byKhuzami, do yourself a big favor: Settle. 

Continue reading 10 things you don’t know.>>

Pic from Photobucket. 


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SEC Charges Goldman Sachs With Fraud On Subprime Mortgages, Paulson & Co. Implicated

SEC Charges Goldman Sachs With Fraud On Subprime Mortgages, Paulson & Co. Implicated

Courtesy of Zero Hedge  

Washington, D.C., April 16, 2010 — The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.

The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.

"The product was new and complex but the deception and conflicts are old and simple," said Robert Khuzami, Director of the Division of Enforcement. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party." 

Kenneth Lench, Chief of the SEC’s Structured and New Products Unit, added, "The SEC continues to investigate the practices of investment banks and others involved in the securitization of complex financial products tied to the U.S. housing market as it was beginning to show signs of distress."

The SEC alleges that one of the world’s largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.

According to the SEC’s complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1 (ABACUS) all represented that the RMBS portfolio underlying the CDO was selected by ACA Management LLC (ACA), a third party with expertise in analyzing credit risk in RMBS. The SEC alleges that undisclosed in the marketing materials and unbeknownst to investors, the Paulson & Co. hedge fund, which was poised to benefit if the RMBS defaulted, played a significant role in selecting which RMBS should make up the portfolio.

The SEC’s complaint alleges that after participating in the…
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Zero Hedge

Blain: "Markets Are Still In Denial/Fool-Themselves Mode"

Courtesy of ZeroHedge View original post here.

Authored by Bill Blain via MorningPorridge.com,

“Cheer up my lads ‘tis to glory we steer, to add something new to this wonderful year…”

Stocks tumbled 20% in H1, but Central Banks are fixated on Inflation as the No 1 priority with higher interest rates nailed on. Supply chain issues remain difficult, meaning corporate earnings will remain under pressure. The market is setting up for further weakness through H2....



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Kimble Charting Solutions

Nvidia Stock On The Ropes As Semiconductors Leadership Tested!

Courtesy of Chris Kimble

It is imperative for active investors to understand the importance of market leadership, both on the way up and down.

And this is proving to be very true of the Semiconductors sector. The Semis played a HUGE role in the tech bull market, helping to push the Nasdaq and Nasdaq 100 higher and higher over more than a decade.

But, as we have covered several times this year (click here for our latest article on Semis), tech turned lower late last year… and the Semis were the warning as a leader to the downside.

So t...



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ValueWalk

DE Shaw Ordered To Pay Record $52m Defamation Award To Daniel Michalow

By Anna Peel. Originally published at ValueWalk.

Today, a FINRA arbitration panel awarded the largest defamation award to an individual in recent history to Daniel Michalow in the amount of $52,125,000.

This dispute between D. E. Shaw, one of the largest and most successful hedge funds in the world, and its former partner Daniel Michalow, received significant press attention over the past four years.

Contrary to what D. E. Shaw led the public and its investors to believe about the firm’s “investigation” and Daniel’s departure, “the panel specifically finds that Claimant did not commit sexual misconduct.” The panel also found the members of D. E. Shaw’s Executive Committee, inc...



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Phil's Favorites

Kremlin tightens control over Russians' online lives - threatening domestic freedoms and the global internet

 

Kremlin tightens control over Russians’ online lives – threatening domestic freedoms and the global internet

Russia has pioneered the concept of digital sovereignty and used it to severely restrict Russians’ access to the internet. NurPhoto via Getty Images

Courtesy of Stanislav Budnitsky, Indiana University

Since the start of Russia’s war on Ukraine in late February 2022, Russian internet users have experienced what has been dubbed the descent of a “...



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Politics

Kremlin tightens control over Russians' online lives - threatening domestic freedoms and the global internet

 

Kremlin tightens control over Russians’ online lives – threatening domestic freedoms and the global internet

Russia has pioneered the concept of digital sovereignty and used it to severely restrict Russians’ access to the internet. NurPhoto via Getty Images

Courtesy of Stanislav Budnitsky, Indiana University

Since the start of Russia’s war on Ukraine in late February 2022, Russian internet users have experienced what has been dubbed the descent of a “...



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Chart School

Gold Stocks Review

Courtesy of Read the Ticker

Gold miners do well when gold is higher, and borrowing and gasoline costs are lower.

Lets start with a question: Why do governments own gold?

1) The need it to support their economy during an energy crisis. If their currency is collapsing oil producers will not take fiat for settlement, but they will accept gold.
2) While the US prints money the purchasing power of the US dollar is declining, hence gold is a hedge.

A particular market action which forces traders to move gold higher is when oil moves higher while the US dollar falls. This means the US dollar is losing purchasing power against oil, therefore gold will go higher as the demand for (1) above explodes. Some history, gold moved higher sharply in these years 2007, 2011, 2016, 2020. All ...

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Digital Currencies

Scams and cryptocurrency can go hand in hand - here's how they work and what to watch out for

 

Scams and cryptocurrency can go hand in hand – here’s how they work and what to watch out for

The anonymous nature of cryptocurrency transactions is ideal for con artists. seksan Mongkhonkhamsao/Moment via Getty Images

Courtesy of Yaniv Hanoch, University of Southampton and Stacey Wood, Scripps College

When one of our students told us they were going to drop out of college ...



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Biotech/COVID-19

At last, COVID-19 shots for little kids - 5 essential reads

 

At last, COVID-19 shots for little kids – 5 essential reads

Millions of U.S. children between the ages of 6 months and 4 years will soon be eligible for COVID-19 shots. FatCamera/E+ via Getty Images

Courtesy of Amanda Mascarelli, The Conversation

For many parents of kids under age 5, a safe and effective COVID-19 vaccine could not come soon enough. A full year and a half after shots first became available for adults, their wait is nearly over.

On June 17, 2022, the Food and Drug Administration ...



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Promotions

Phil: Be the House Not the Gambler at the Fintech Conference in Vegas

 

Phil gave an excellent, educational presentation called "Be the House Not the Gambler: Using Stock Options to Significantly Boost Your Portfolio Performance" at the FinTwit Conference hosted by Lupton Capital and Benzinga on May 14 in Las Vegas. The video is set to start playing at 5:30:45, when Phil takes the stage (but you can see previous presentations by backtracking).

AGENDA 
9:00 AM Opening Remarks with Jonah Lupton, Entrepreneur & Investor
9:05 AM Wagging the Dog: How to Profit From Derivative Driven Moves in the Market with Steven Place, Founder, Investingwithoptions.com
10:00 AM The MarketWebs & The Path of Least Resistance, Christian Fromhertz, CEO, The Tribeca Trade Group
10:55 AM Fireside Chat with Gareth Mann, Founder & CEO, AlphaStream & Spencer Israel, Executive Producer, Benzinga
11:25 AM Sponsor Pitch: Carolyn Bao, VP of Marke...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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