Comments on: The “blame Goldman” defense http://blogs.reuters.com/commentaries/2009/08/05/the-blame-goldman-defense/ Now raising intellectual capital Sun, 08 Nov 2015 08:31:30 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: james reginald harris, jr http://blogs.reuters.com/commentaries/2009/08/05/the-blame-goldman-defense/comment-page-1/#comment-1743 Thu, 06 Aug 2009 10:13:39 +0000 http://blogs.reuters.com/commentaries/?p=2198#comment-1743 I do not know what is presently in place at the major banks which have fund managers and traders who are basically entrepreneurs with no capital investment but there should be an Internal Security Desk.

The Internal Security Desk should operate on mathematical models of Capital Scale, Debt Proportions, Team Experience, Trading Volumes and profit/loss (which should be looked at with equal scrutiny). That the Internal Security Desk should automatically intercept information and distribute to the SEC via Notification when certain mathematical models are violated by any individual component of the firm. These models should be established by the SEC and mandatory to all automated trading and firms with volumes over a certain threshold. The Security Desk should be staffed by personnel trained in Investigations of Securities Violations and should be the firms internal police force. That the internal trading police force, should have powers and obligations beyond the board of directors to the SEC and Treasury by a (“Special Securities Policing License”). Like security guards at a facility, these (“Federally Licensed Securities Trading Monitors”) should upon violation of accepted mathematical models be able to monitor and control all communications and/or remove individuals who represent a threat to Public Financial Safety through Improper Trading Conduct.

I did not have sex with that woman … …

You can not always count on individual accountability, even from the most outstanding individuals. We’re human and we make errors. That is why in the trading world, we need a new regulatory framework for Trading Security Officers who report directly to their firm and the Police (DOJ & SEC).

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By: james reginald harris, jr http://blogs.reuters.com/commentaries/2009/08/05/the-blame-goldman-defense/comment-page-1/#comment-1742 Thu, 06 Aug 2009 09:35:55 +0000 http://blogs.reuters.com/commentaries/?p=2198#comment-1742 I think the lesson in the crisis to the public is that White-collar Crime and Fraud are very hard to detect and quite difficult to prosecute and that reliance on regulators is not sufficient protection for an investor, entrepreneur or institution.

With the advanced capabilities of electronics, there is no reason large firms can not police against the activities that got these two individuals in to trouble. It is in deed sad that when the fund was under distress (and its managers with it) that Bear Stearns did not have an internal mechanism to regulate what these managers were telling investors.

I am not privy to the evidence, these individuals conduct prior to the funds crisis or if there were complaints regarding their ethical performance prior to their intentional misleading of investors. However considering the bank of America compensation issue and the fact that these individuals worked for Bear Stearns, that the liability for their actions is in part that of Bear Stearns and they should not receive a Madoff Style sentence.

By nature of their position at a firm, they were not chiefs, but soldiers and the firm should regulate that its solders act in a legal fashion with association to such large pools of capital.

Especially when under duress, as they were.

The duress element should be considered if behavior prior to the implosion was inconsistent with criminal misconduct during the implosion.

I think that they are guilty of poor judgment under duress and that the firm (or its remnants) is to blame.

The firms have been excused from policing their employees and fines like the $33mm are insufficient deterrent for internal ethics in the policing of improper conduct.

The SEC should have much stiffer fines and has not kept up to date but that is beating a dead horse, much like these two individuals who face being scapegoated for an industries abjectly absent internal governance.

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By: Steve Hunts http://blogs.reuters.com/commentaries/2009/08/05/the-blame-goldman-defense/comment-page-1/#comment-1719 Thu, 06 Aug 2009 00:02:31 +0000 http://blogs.reuters.com/commentaries/?p=2198#comment-1719 Read this and tell me how Goldman Sachs is innocent-

http://www.rollingstone.com/politics/sto ry/29127316/the_great_american_bubble_ma chine

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