As we wrote in this blog over a year ago, it is certainly odd that not one banker, hedge fund manager (real hedge fund managers, not dear Bernie’s ponzi scheme), or one regulator, or member or employee of the Fed has been indicted for criminal behavior or been sued for neglect, unless you count the $550 million settlement by Goldman Sachs to avoid a criminal investigation. At least we know the going price for “sticky” legal problems of that magnitude to get “resolved”.
I suggested then that the entire blue pinstriped suit bankster crowd all get projected against the RICO Act because I suspect they would test “positive. What do you think? Well, we might just get a chance to see that happen. All I can say is finally someone with some guts. I am speaking of Patrick Byrne, CEO of Overstock.com.
Speaking on the Salt TV Network recently, President and CEO of Overstock.com (NASDAQ: OSTK) Patrick Byrne referred to his company as “bold” and revealed that, in November 2010, after four years of fighting, a judge forced Goldman Sachs (NYSE: GS) to turn over some documents that prompted Overstock to re-file its suit against Goldman as a RICO [Racketeer Influenced and Corrupt Organizations] action. The case went before a hearing and it has been approved.
“The laws that got written in the ’80s to allow the feds to go after organized crime – the lawyers can now look at what they did,” said Byrne. “There is nothing about RICO that says you have got to use a gun. This was a highly organized crime.”
Byrne went on to say that he feels Americans are living in an oligarchy. “There are two power centers in this country – Wall Street and Washington D.C., and Wall Street has really got Washington D.C. under its thumb,” said Byrne. “Five years ago, people thought I was a lunatic to say that, and now it is trivially obvious. That means that you can’t count on Washington. You cannot count on the regulators, you cannot count on the Senate Banking Committee, and you cannot count on the New York-based financial press. The only thing that is going to fix this is to get them in front of 12 Americans in a jury room. That is the only thing they cannot buy in America.”
The case will be heard before a jury on December 5, 2011. “It is going to be the OJ Simpson trial of the financial world,” said Byrne. “It will be heard in California, in San Francisco. It will be exciting. I have said publically that I will not settle. It would be treason for me to settle. It would be like asking a Jewish person, how much would you settle with Hitler for? There is really no number. It is not that complicated a case. I am hearing that it is only going to take a few weeks. It is very simple. There are emails and a bunch of data – it is just about presenting it all to a jury.”
Goldman Sachs’s opportunistic moves do not always pan out. Take Litton Loan Servicing which Goldman bought in 2007 when it was trying to obtain as many sub-prime mortgages as it could in order to concoct those CDOs that it foisted on unsuspecting buyers before the financial meltdown in 2008. Goldman Sachs is now considering selling this company.
I do not wonder why they are selling it: Litton serviced $9.7 billion in mortgages and had a delinquency rate of 43% in 2009. Goldman Sachs halted 23,000 foreclosures in order “to sort out affidavits that were signed without a review of the documentation.”
Goldman Sachs’s actions surrounding Litton lie at the heart of the fraud that Goldman Sachs perpetrated, not only on the homeowners of the US but also on the pensions and savings funds that bought the highly rated CDOs that Goldman Sachs touted.
Goldman Sachs had to buy a less-than-sterling company in the hopes of keeping its CDOs rolling along and raking in the money but Litton proved to be a horror show for hundreds of the homeowners who were caught in its snare. Customers who were unfortunate enough to buy their mortgages through Litton have a great deal to complain about. See the hundreds of complaints against Litton listed here.
So there are both ends of the string, now it is up to the courts to unravel the knots to determine if indeed Goldman Sachs conspired to defraud investors. [you are supposed to looked shocked here] This show will start in San Francisco on December 5th. I’ll bring the popcorn, you can get the sodas, cause this is going to be a really good show! I have visions of little rats jumping ship!