-Caveat Lector- Euphorian spotted this on the Guardian Unlimited site and thought you should see it.
To see this story with its related links on the Guardian Unlimited site, go to http://www.guardian.co.uk 'Flipping' Goldman fingered Congressional report offers damaging summary of bank's dotcom boom years David Teather in New York Thursday October 03 2002 The Guardian Goldman Sachs was yesterday dragged into the scandals that have shaken Wall Street when a congressional panel detailed a litany of alleged abuses designed to enrich the bank and its clients. The allegations were made in a report from the House financial services committee, which provided a damaging indictment of Wall Street practices in the 1990s boom. Goldman was accused of allocating shares in sought-after stock market flotations to executives of 21 companies as an inducement for investment banking business. The shares were distributed to, among others, former Enron chief executive Kenneth Lay, disgraced Tyco chiefs Dennis Kozlowski and Mark Swartz, and John Legere of Global Crossing. Other Goldman clients to have received shares in oversubscribed IPOs included the last remaining dotcom favourite, Meg Whitman, chief executive of online auctioneer EBay, Jerry Yang, the co-founder of Yahoo! and William Clay Ford, of Ford Motor Company. Ms Whitman is a Goldman director and EBay has paid the firm $8m in investment banking fees since 1996. But the report also highlights broader abuses during the internet-driven frenzy of the last decade. They included the use of research to hype companies that were investment banking clients, the possibly illegal underpricing of IPO shares to enable quick profits, and potentially improper due diligence in bringing companies to market. Two thirds of the 22 firms brought to market by Goldman examined by the committee have since lost at least 96% of their value, and several have filed for bankruptcy protection. The committee noted that Goldman dropped analyst coverage of 17 but did not, in a single case, issue a "sell" recommendation. "Our goals are to correct abuses in the markets and to make the system fair for the average investor," said the committee's chairman, Michael Oxley. "People are willing to take a risk with their money, but they're not willing to gamble when the system seems rigged against them. There is no equity in the equities market." The report also noted alleged abuses at Salomon Smith Barney and Credit Suisse First Boston, which have both been under the spotlight of markets regulator the SEC and New York State's attorney-general, Eliot Spitzer. There is a growing sense among Wall Street critics that the investment banks which made it rich in the 1990s not only profited from the boom but were the driving force behind its creation - and the damaging slough that has accompanied its bust. The SEC yesterday reached agreement with Mr Spitzer, the New York stock exchange and others, to coordinate efforts on their investigations. In the next few weeks they will develop a template that can be used to work out settlements for the inquiries still under way. Many sold the shares within days for a huge profit - so-called flipping. Eight of the firms Goldman underwrote gained at least 173% on the first day of trading. Tyco has given Goldman $57m in banking fees since 1996, Global Crossing has paid $45m and Enron $19m. A spokesman for Goldman said the report was "an egregious distortion of the facts". Recipients of the IPO shares were clients of the bank's private wealth management business who had placed orders for shares. "Any suggestion that we were involved in improper practices is simply untrue." Copyright Guardian Newspapers Limited <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://peach.ease.lsoft.com/archives/ctrl.html <A HREF="http://peach.ease.lsoft.com/archives/ctrl.html";>Archives of [EMAIL PROTECTED]</A> http:[EMAIL PROTECTED]/ <A HREF="http:[EMAIL PROTECTED]/";>ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
