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Market Apparently Shocked To Find Out Goldman Sachs CEO Takes Investigations Seriously, Hires Best Lawyers Money Can Buy

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Goldman Sachs Chief Executive Lloyd Blankfein has hired Reid Weingarten, a high-profile Washington defense attorney whose past clients include a former Enron accounting officer, according to a government source familiar with the matter...The move to retain Weingarten comes as investigations of Goldman and its role in the 2007-2009 financial crisis continue. The Securities and Exchange Commission scored a $550 million settlement against the bank in a fraud lawsuit in July 2010, but other investigations continue. "Why do you bring in someone like that?" said the source, who was not authorized to speak publicly. "It says one thing: that they're taking it seriously." [Reuters]

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Convicted Insider Trader Matthew Kluger "Shocked" To Find Out He Couldn't Trust The Guys With Whom He Was Committing Federal Crimes

Remember Matthew Kluger? To recap, he's the mergers and acquisitions lawyer who spent two decades feeding inside information to convicted insider trader Garrett Bauer, that he picked up from partners at the six different law firms he worked at over the years. The operation, which included Kenneth Robinson, an old friend of Kluger who acted as the tips mule between MK and GB, went very smoothly for a very long time (17 years), and would have continued going smoothly had Robinson stuck with the plan instead of deciding to start making the same trades as Bauer, raising suspicion with SEC, which was watching the men and used "relationship analysis" to determine they were "part of the same trading scheme and had a common source: Kluger." In March 2011, federal agents showed up to Robinson's house and after thinking it over for a couple days, he decided to cooperate by giving prosecutors a step-by-step guide to how the scam operated, telling them Kluger's name, and recording conversations with Kluger and Bauer in which the two said things like "I went right up to my apartment and I broke the phone in half and went to McDonald's and put it in two different garbage cans" and "I can't sleep. I can't sleep. I'm waiting for the FBI to ride into my apartment" and "We have to get all the fingerprints off that money. Like you wearing gloves or something and wiping every bill down or something" and "There is no way [these cell phone conversations] could ever be recorded." Robinson was ultimately sentenced to 27 months in prison, Bauer got nine years (despite his 147 speeches about how insider trading is a bad idea on the college lecture), and Kluger was handed 12 years, beating Raj Rajaratnam for "the longest insider trading U.S. history." Recently, Kluger sat down with Bloomberg to offer a few more specifics re: how the scheme went down ("Sometimes it was a deal I was working on, sometimes it was a deal I heard being discussed in the office"; "I would call Ken and say 'X/Y/Z company is considering a takeover of Q company") but what he really wants to talk about? What was the biggest surprise and hardest punch to the gut in all of this? Is what it was like finding out that his buddies were stiffing him on cuts of their ill-gotten gains. "On the day I was arrested, when they showed me the criminal complaint against me, finally that day, I saw the amounts that had been traded and I was absolutely shocked. Our agreement from the beginning was always that that profits were being shared equally three ways. I felt very used and manipulated, that he was basically pumping me for information, that he was then lying to me about how he was using and then allowing his obviously better friend to make millions and millions of dollars while telling me that that was not happening. “Maybe you want to laugh and say of course there’s no honor among thieves,” Kluger added. “But even when you’re doing something you’re not supposed to do, I trusted that they were honoring the commitments that they had made.” You can imagine Kluge's utter dismay to find out that such was not the case. It's one thing to get nailed for insider trading, it's another to find out you could've been making 10 times the profits while doing so.

Fox Business Senior Email Correspondent: Thousands Of Goldman Employees Saw Muppet Movie, Wanted To Talk About It The Next Day

Late last week, investigative reporter Charlie Gasparino came out with a bombshell story: after reading former employee Greg Smith's allegation that he'd seen and heard colleagues refer to clients as "muppets," the British term for stupid people, the firm launched an investigation into the claim (e.g. searched emails for said word). On Friday, Gasparino breathlessly reported that while  Goldman did find some muppet mentions, they referred to the Jason Segal film and were not malicious in their intent (quoth CG: "GS found no evidence of malicious muppet talk in emails).  While a lesser journalist would have been content to take the source at his or her word, Charles Gasparino is no such journalist. He get kept digging on this one and now, amazingly, has more to add: "People close to Goldman tell FOX Business 98% of the email muppet use referred to the movie. Sources at Goldman also say the malicious muppet use in emails involves name calling among colleagues; apparently at Goldman they call each other muppet. Sources say the firm find no evidence so far to substantiate Smith’s claims that people were talking about clients.” Gasparino on Muppet Movie Referrals in Goldman Emails [FBN]