Goldman "Sucks" Charged with Fraud; LaRouche Asks: Is the Taxpayer Responsible To Bail Out Fraud?

April 17, 2010 (LPAC)—The U.S. Securities and Exchange Commission has finally decided to lift the veil from a tiny corner of the massive fraud at Goldman "Sucks," by charging the company with an $11 billion securities fraud against its own customers in 2007. Hedge fund bandit John Paulson had somehow figured out that the shakiest parts of the subprime market were about to take a dive, and went to Goldman to find some way to make money by betting that the mortgage-backed securities (MBS) based on them would collapse.

Goldman let Paulson pick a package of those MBS which he thought would tank the quickest, and then turned around and sold them to its own customers among "foreign banks, pension funds, insurance companies and other hedge funds." These investors were told that the securities they were buying had been selected by an "independent, objective third party," while actually John Paulson had chosen them as those most likely to fail the fastest, and was using Goldman to bet that they would fail. The suckers lost billions of the $10.9 billion they invested, and the money they lost was passed through to Paulson, after Goldman took its cut.

This is just the tiniest part of the fraud at Goldman which a "Pecora" style investigative commission, as LaRouche has demanded be established, would find, if it were let loose to find it. The same deal on which the SEC sued, also exposed Goldman's fraudulent use of credit-default swaps (CDS) to provide so-called "insurance" for such phony transactions. Goldman's biggest counterparty for such CDS, namely AIG, has been bailed out by the taxpayer to the tune of $189 billion; $13 billion of it was passed right through to Goldman, in what was Goldman's second bailout with taxpayer money.

This is a civil suit, but criminal charges will surely follow, and a lot else. "Is the taxpayer responsible to bail out fraud? Find out the criminal penalties for what they did. We should get the $186 billion back; shouldn't the fed get the money back?" LaRouche asks.