Very Interesting Information on the Abacus Prospectus RE: Goldman Sachs

I do not have the Abacus prospectus in my possession, but I do have the exact wording involved apparently below. It will be interesting to see how the SEC pursues this as it is clearly delineated in the prospectus that was handed out that Goldman can/will go against you in the trade...


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Goldman Sachs does not make any representation, recommendation or warranty, express or implied, regarding the accuracy, adequacy, reasonableness or completeness of the information contained herein or in any further information, notice or other document which may at any time be supplied in connection with the Transaction and accepts no responsibility or liability therefore. Goldman Sachs is currently and may be from time to time in the future an active participant on both sides of the market and have long or short positions in, or buy and sell, securities, commodities, futures, options or other derivatives identical or related to those mentioned herein. Goldman Sachs may have potential conflicts of interest due to present or future relationships between Goldman Sachs and any Collateral, the issuer thereof, any Reference Entity or any obligation of any Reference Entity.


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Sounds like someone didn't read the contract before going into negotiations...


What do you guys think? Very very very interesting...

Lisa: Get out, get out!
Bart Simpson: All right, Lisa. But as I'm leaving, I'm going to be doing this...
[windmills his arms]
Bart Simpson: -and if you get hit, it's your own fault.
Lisa: Fine. Then I'm going to start kicking air, like this...
[kicks up her foot]
Lisa: And if a part of you should fill that air, it's your own fault.

I don't think the SEC suit is about whether Goldman shorted the securities so much as whether the securities were created purely as a vehicle for Paulson to short.

reply to post by mythatsabigprobe


Read the last couple of lines again

It specifically states that there may be conflicts of interest..

That doesn't get them off the hook if the securities were created purely for Paulson to short. Not even close.

reply to post by mythatsabigprobe


I am pretty sure it does actually.

These are institutional investors and the prospectus in these matters does in fact clear them of conflicts of interest in forming this fund. When you are dealing with a prospectus in these matters this is the "only thing" that matters. I have other prospectus's in my house actually from various hedge funds.. I will take a look at these and look for wording like this when I get a chance..

reply to post by mythatsabigprobe


Also, it is not how you or I view it, it is how the contract law views it of course. They would also have to prove this was the scenario that you stated and then reference the prospectus and prove it I believe.

You're wrong.

The SEC knows something about securities and broker's obligations. This isn't a suit over Goldman taking a short position against it's clients, it's a suit about Goldman committing fraud by creating these securities.

reply to post by mythatsabigprobe


Well we will see.. I am going to take a look at a couple other high profile prospectus and I will post in this thread..

I don't think I am remotely wrong though.. I will ask my dad as well as he is versed in these things

No, a conflict of interest is if they tell you to buy something as they sell, its different if its based on blatant fraud. If the securities were on-the-level, most big time investors don't have a problem with it because they probably know Goldman has got to make money one way or another.
But if its fraud, then Goldman doesn't have a legal leg to stand on no matter what they say in their bolier plate disclaimer.

Originally posted by GreenBicMan
These are institutional investors and the prospectus in these matters does in fact clear them of conflicts of interest in forming this fund. When you are dealing with a prospectus in these matters this is the "only thing" that matters.

I hardly think that is the case. Everyone knows Goldman doesn't care about the money. But rather damaging publicity.

I'm sure the fact they are institutional investors and everyone else is doing this was discussed in some length.

The SEC bringing this case is a political stunt. It's been handled with the proper deference to Goldman by letting them know well ahead of time when this might be happening to protect insiders.

After Kangaroo court is done with this issue there will probably be a settlement of some kind and we'll forget the whole thing ever happened. Maybe they can sack that Fab guy he looks like a decent sacrificial lamb, provided he's compensated for his loss of employment in some way, which I'm sure was probably already taken care of.

This gives the appearance that the government and regulators are doing something. And I'm sure Obama will be quick to capitalise on that.

But there isn't a great deal of substance to this case and it won't do anything to repair the fallout of the sub prime mortgage crisis or the effects of loose monetary policy in response to it.

In the meantime I'm sure they'll keep quantitative easing until they run out of ink.

It's a whitewash.

OK, this is from a PROMINENT REIT (REAL ESTATE INVESTMENT TRUST)

I will not name the company for fear of giving out too much public information


QUOTE
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BLANK and its affiliates, including our officers and one of our directors, will face conflicts of interest caused by compensation arrangements with us and other programs advised by BLANK BLANK which could result in actions that are not in the long-term best interests of our stockholders. The amounts payable to BLANK BLANK upon termination of the advisory agreement may also influence decisions about terminating BLANK BLANK or our acquisition or disposition of investments.....

As a result, these compensation arrangements could influence our advisers advice to us, as well as the judgment of the affiliates of BLANK BLANK who serve as our officers or directors....


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There is much more but too much to type.

Remember this is a REIT, so you do have to be an accredited investor to be involved, just like the former..

So.. looks like buyer beware

Linking the document, for ease of use/perusal...

Abacus 2007 AC1

Stay tuned. Shall be interesting to see what develops.

reply to post by LadySkadi


Nice, didnt know that was publicly available..

reply to post by belial259


I agree, straight up, because especially FINANCE REFORM LEGISLATION

A second note of interest:

Read section number 4 and 5 in the Overview section...

SEC vs Goldman Sachs and Co.

reply to post by CAPT PROTON


I don't see the difference you are insinuating..

It basically says in laymen terms :

"yes, we will go against you in this trade - and yes we don't have your best interests in mind, but we are guessing that you will either not read this or take it seriously"

reply to post by LadySkadi


I believe #4 was directly stated in the prospectus - just in "other" wording of course

Originally posted by LadySkadi
Stay tuned. Shall be interesting to see what develops.

Yes this certainly opens up a whole new realms of possibilities.

Surely something must be done about this problem of fraud at the major banks. But what? Perhaps we could pass some kind of bill that had the power to break up the banks and gave more power to regulators. That seems to be an idea that's just kinda been put out there in the media.

But who could possibly undertake this important and rather delicate task. They'd need to have a good working relationship with the banks to avoid any unwanted effect on "the continued economic recovery" we keep hearing about.

What if the Federal Reserve, in conjunction with other central banks, or perhaps even the IMF could assist in this? Certainly they are well placed and funded to deal with these issues in a discreet manner so as not so spook the markets. The New York branch of the Federal reserve has a long history of conducting business with the banks.

I do believe the IMF just got a rather large increase in funding to deal with things just like this. Isn't that handy?

But how could we contain large financial institutions like Goldman and separate their operations without a whole lot of hassle? You'd have to discuss that with several other countries.

Maybe the g20. Who just as it happens are going to be in Washington for a meeting in just a few days.

www.g20.org...

Quite a fortunate coincidence wouldn't you agree?

Well I would honestly take the FED overseeing this than congress..

Congress gets paid by Banksters

FED at least is already rich and they would not be blinded by sums of 1,000,000 contributions etc..

Sorry to say but I trust Big Ben Bernanke x11000 over our Senate Finance Committee