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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    Zero Hedge

    China Delivers Advanced Frigate To Pakistan Navy

    Courtesy of ZeroHedge View original post here.

    By Joe Saballa of The Defense Post

    China has delivered a second Type 054A/P frigate to the Pakistan Navy, providing a further boost to Islamabad’s maritime defense.

    Named the PNS Taimur, the frigate is reportedly equipped with cutting-edge weapons and sensors to support maritime surveillance and combat missions.

    It also has the latest combat management and electronic warfare systems, making it suitable in multi-threat environments.

    Commissioning Ceremony of ...



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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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    ValueWalk

    These Are The Ten Best-Performing Inverse Equity Funds

    By Aman Jain. Originally published at ValueWalk.

    Inverse funds are instruments that use various derivatives to benefit from the decline in the value of the underlying security. These funds could be of many types, such as those investing in debt, equity and more. In this article, we will be talking about Inverse Equity funds. These funds aim to generate returns that match an inverse fixed multiple of short-term returns of an equity index. Let’s take a look at the 10 best-performing Inverse Equity funds.

    Ten Best-Performing Inverse Equity Funds

    We have referred to the past one year return data (from money.usnews.com) of the ...



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    Phil's Favorites

    'A revolutionary ruling - and not just for abortion': A Supreme Court scholar explains the impact of Dobbs

     

    ‘A revolutionary ruling – and not just for abortion’: A Supreme Court scholar explains the impact of Dobbs

    Anti-abortion protestors celebrate the overturning of Roe v. Wade outside the US Supreme Court on June 24. Olivier Douliery/AFP via Getty Images

    Morgan Marietta, UMass Lowell

    The Supreme Court’s decision to reverse 50 years of constitutional protection for the right to get an abortion is more than 200 pages long. ...



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    Politics

    'A revolutionary ruling - and not just for abortion': A Supreme Court scholar explains the impact of Dobbs

     

    ‘A revolutionary ruling – and not just for abortion’: A Supreme Court scholar explains the impact of Dobbs

    Anti-abortion protestors celebrate the overturning of Roe v. Wade outside the US Supreme Court on June 24. Olivier Douliery/AFP via Getty Images

    Morgan Marietta, UMass Lowell

    The Supreme Court’s decision to reverse 50 years of constitutional protection for the right to get an abortion is more than 200 pages long. ...



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    Kimble Charting Solutions

    Oil Stocks Counter-Trend Rally Over Should Support Break, Says Joe Friday

    Courtesy of Chris Kimble

    For over 2 years, all crude oil prices did was go higher… and higher. And consumers have been feeling this pain as the gas pump.

    Well, this month crude oil prices turned sharply lower joining the broad based commodities selloff. Could this be the start of a long awaited pullback? If so, oil related stocks and sectors would likely also turn lower.

    It’s that day of the week, so let’s turn to Joe Friday for “The facts, Ma’am. Just the facts.”

    Today’s chart is a long...



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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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    About Ilene:

    Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.