Goldman Banged By DOJ; 5bil MBS Hickey

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(MarketsMuse.com)-Announced after the close of trading on Thursday, Goldman Sachs (NYSE:GS) made a $5.1 billion settlement with the U.S. Department of Justice, AGs from NY and IL and two other federal agencies in connection with the big bank’s underwriting and sale of mortgage-backed securities (MBS) sounds whopping, but seemed to have little impact on the Squid’s stock price in after-hours trading ..Below extract courtesy of CNBC..

Goldman Sachs  said Thursday that its fourth-quarter earnings will take a roughly $1.5 billion hit as it has reached a nearly $5.1 billion settlement agreement in principle related to its “securitization, underwriting and sale of residential mortgage-backed securities (MBS) from 2005 to 2007.”

goldman-sachs-squidThe bank said in a Thursday release that its agreement in principle will resolve actual and potential claims from the Department of Justice, the New York and Illinois Attorneys General, the National Credit Union Administration and the Federal Home Loan Banks of Chicago and Seattle.

The terms of the agreement say that Goldman will pay a $2.385 billion penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief. The bank said that the relief will be partly composed of principal forgiveness for underwater homeowners and distressed borrowers.

Goldman will also contribute to construction financing, affordable housing, and debt restructuring support.

Shares of the Squid traded slightly negative in after-hours action.

The agreement in principle is still subject to final negotiation of the documentation, the bank said.

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How Feds Find Bad Actor Wall Street Traders-CNTRL-F

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Wall Street broker-dealer traders beware, the FEEBS aka FEDS aka DOJ as well as SEC are building an acronym library to filter and find incriminating dialogue within email and chat messages, according to a recent news piece from Bloomberg LP. For alphabet soup aficionados and algorithm authors, the following suggests that brokerdealers will need to be coming up with a new code language to keep hidden from law enforcement eyes peering into emails and IMs.

BrokerDealer.com is home to the global market’s largest database of brokerdealers operating in more than 30 countries across the free world.

(Bloomberg) — Criminals always slip up. They leave behind fingerprints. Hair. A cigarette butt.

A telltale acronym.

TYOP (tell you on phone), TOL (talk offline) and LDL (let’s discuss live) are red flags for prosecutors combing through the e-mail transcripts of Wall Street traders suspected of illegal activity. No need for a crime lab. A simple search — Control-F on the computer keyboard — has become one of investigators’ favorite weapons to uncover possible lawbreaking, according to defense attorneys and current and former prosecutors who agreed to speak on condition of anonymity.

“Taking a conversation offline provides evidence of intent because if you’re trying to cover your tracks, you probably know what you’re doing is wrong,” said Eugene Ingoglia, a partner at Morvillo LLP and former assistant U.S. attorney for the Southern District of New York.

Phrases such as “call my cell” and “let’s go off e- mail” remain popular among the people who plot insider trades or the rigging of some of the world’s biggest markets. New expressions and acronyms pop up all the time, and authorities say they build lists of favored terms.

Evasion techniques can get creative. Raj Rajaratnam, the fund manager convicted in 2011 of insider trading, would write “fon” instead of “phone.” Prosecutors said they suspected the intentional misspelling was meant to distract the all-seeing electronic Javert of Control-F.

 

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