Goldman Sachs SEC : Financial Reform
The gloves have come off. The White House and Goldman Sachs, who’ve long been in lock step on economic policy, are now, according to political blogger Taegan Goddard, gearing up for “all out war”.
Definitely the conflict revolves around the SEC’s fraud prosecution of Goldman Sachs, announced last week, but that’s just the tip with the iceberg in this grudge match.
The fraud prosecution PR battle is just a part of the bigger war on Capitol Hill above the financial reform bill. The president is scheduled to give a key speech on the ills of Wall Street as well as the pressing require for monetary reform at New York’s Cooper Union on Thursday. And Obama as well as the White House are attempting to leverage the anti-Goldman sentiment created by news of the fraud investigation to obtain as much political benefit as feasible.
They are going complete bore – a Google research using the words “Goldman Sachs” and “SEC” yields among its top sponsored links a BarackObama.com ad promoting the economic reform bill, as noted by the Los Angeles Times. Goldman has also occur up with their very own search link that sends users utilizing the same two research terms to the company’s response for the SEC’s fraud complaint.
Goldman is fighting the PR war on a number of fronts. CEO Lloyd Blankfein sent out a voicemail to Goldman’s employees more than the weekend. He emphasized the primary talking points in Goldman’s PR campaign: that the senior management condoned none from the alleged misrepresentations of Goldman’s role inside the disputed deals, and that Goldman had in fact lost cash about the deals in question.
The SEC complaint alleges that bankers involved with a Goldman fund named Abacus have been short-selling CDOs — ie., betting they would fail — while the bank also promoted them to customers. The New York Times also published a report these days saying that disputes in 2006 in between the Goldman executives heading Abacus as well as other Goldman leaders concerning the future of the housing industry reached large levels of Goldman management. even perhaps as high as Blankfein’s office.
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MF Global Brings Corzine Again to Wall Street
Jon S. Corzine, the former governor of New Jersey, is again in finance.
Mr. Corzine, which is also a former chief executive of Goldman Sachs, is now the chairman and chief executive, of MF Global Holdings, a broker in futures, alternatives and derivatives. He’ll also become a partner at J.C. Flowers & Company, the equity finance firm specializing in financial companies.
MF Global said Tuesday afternoon that Mr. Corzine would dominate from Bernard W. Dan, which resigned from MF Global as chief executive for “personal reasons.” Mr. Dan will remain with MF Global through May 16 help with Mr. Corzine’s transition.
“MF Global is a firm with tremendous potential and excellent talent,” Mr. Corzine in a statement. “I see a substantial opportunity for the firm to expand its leadership position in serving clients globally in cash and derivatives markets.”
J.C. Flowers said in its own statement that it had recommended Mr. Corzine like a replacement for Mr. Dan. The firm is a major shareholder in MF Global: based on Bloomberg News, J.C. Flowers invested a minimum of $300 million in MF Global in May 2008 and controls two seats on MF Global’s nine-member board.
“We know he is very excited by MF Global and its potential for further growth,” a J.C. Flowers spokesman said in a statement. “We are also very proud to have played a role in bringing Mr. Corzine back for the financial services arena.”
Mr. Corzine and J. Christopher Flowers, the eponymous head of the buyout shop, have known each other since their days at Goldman Sachs.
Mr. Corzine, a Democrat, was defeated in the re-election bid in November 2009 by Chris Christie, the Republican candidate.
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