An older (Jan 2011) but interesting article from Bloomberg BusinessWeek, “Worthless Stocks from China – When a retiree in Texas discovered that some Chinese companies listed in the U.S. are frauds, he unleashed an army of short-sellers“.
For the record.
LAST Wednesday at around 3 p.m., the Securities and Exchange Commission and Goldman Sachs settled an epic, seismic battle — one waged over whether the storied investment bank defrauded investors in a transaction that regulators said Goldman had built to self-destruct.
The final terms of the settlement were hashed out over the telephone. On one end, Gregory K. Palm, Goldman’s general counsel, agreed to the exact language his bank would use in statements about the settlement. As one of the longest-serving executives of the bank and a Goldman shareholder, Mr. Palm also had his own reputation and his personal fortune on the line.
On the other end, the S.E.C.’s director of enforcement, Robert Khuzami, was joined by his old friend and deputy, Lorin Reisner. Mr. Khuzami, a former in-house counsel at Deutsche Bank, was well-versed in the inner workings of Wall Street deal-making.
In the end, Goldman decided to steer clear of a protracted and damaging trial by paying a $550 million penalty, which the S.E.C. went out of its way to describe as the largest ever against a Wall Street firm. Goldman acknowledged that its marketing materials for the deal in question, known as Abacus, were lacking, and it agreed to greater disclosure around such transactions in the future — a concession that affects the entire financial community and could eat into some of the lush profits firms earn on complex deals engineered in the shadows.
For all of the lawyers on the phone, a court trial would have been a career-capping event. The case centered on Abacus, Read the rest of this entry »