SEC Charges Goldman Sachs & Co. with Civil Fraud, and British and German Authorities May Follow Suit

On Friday, April 16, 2010, the Securities and Exchange Commission (SEC) announced bringing civil fraud charges against Goldman Sachs & Co. SEC's complaint alleges that Goldman Sacks sold securities based on risky mortgage investments without disclosing to buyers that hedge fund Paulson & Co. who had influence in the selection of profolio, was betting the securities would fail. Goldman Sachs has denied all charges. SEC's compliant has not charged Paulson & Co. or its billionaire manager John Paulson.

On the news of SEC's charges, shares of Goldman Sachs & Co. fell 12.8 percent, a loss of $12 Billion in market value. The news also impacted the broader markets, putting an end to a six-day U.S. stock market rally, and causing the European markets to slump.

Founded in 1869, Goldman Sachs is currently the largest investment banking firm in the United States. Commentators believe that although Goldman Sachs may be able to defend itself against SEC charges, the damage to the company's image may allow Morgan Stanley, the second position U.S. investment banking firm, and foreign rivals such as Deutsche Bank and UBS to take on a portion of Goldman Sachs' market.

British Prime Minister Gordon Brown, and German government spokesman Ulrich Wilhelm said their governments will seek information from the SEC about Goldman Sachs Group's operations; the investigations may lead into legal action in those jurisdictions.

The materials for this blog were gathered from various sources including The Associated Press, Business Week, and Reuters. For additional information, run a search on Google.

Robin Mashal is a Los Angeles business attorney, and a partner at the law firm of Hong & Mashal LLP. He can be reached by phone at (310) 286-2000.

Justice Stevens Considers Retiring from the United States Supreme Court

In his recent press interviews, Justice John Paul Stevens has hinted at his intentions to retire from the United States Supreme Court. “I do have to fish or cut bait, just for my own personal peace of mind and also in fairness to the process,” he told the New York Times, “The president and the Senate need plenty of time to fill a vacancy.” At age 89, the Honorable John Stevens is currently the second-oldest justice to have served at the Supreme Court, after Justice Oliver Wendell Holmes. With 34 years of service at the Supreme Court bench, Justice Stevens is currently the fourth-longest-serving justice in the Court's 220-year history.

Justice John Paul Stevens

Justice Stevens was born April 20, 1920 in Chicago, Illinois. In 1941, he earned his bachelor of arts in English from the University of Chicago. Soon thereafter, he enlisted in the U.S. Navy, where he served as an intelligence officer from 1942 to 1945, and was awarded a Bronze Star for his service. He later attended Northwestern Univeristy School of Law from where he obtained his juris doctorate degree in 1947 magna cum laude. After finishing law school, Stevens clerked for Justice Wiley Rutledge during the 1947-48 Supreme Court term. Stevens was admitted to the State Bar of Illinois in 1949. He gained expertise in antitrust laws, first as an associate of Poppenhusen, Johnston, Thompson & Raymond, and later as a partner in the firm of Rothschild, Stevens, Barry & Myers. He was invited to teach an atitrust course at the University of Chicago Law School, and in 1969 he acted as a special prosecutor on the Greenberg Commission where he investigated corruption charges against Supreme Court justices. In 1970, President Nixon nominated Stevens to the Seventh Circuit Court of Appeals, and in 1975 President Ford nominated him to the U.S. Supreme Court.

Although Justice Stevens has not yet officially announced his retirement, people believe the announcement should come by April 28, 2010, when the current Supreme Court term ends. This will provide President Obama an opportunity to appoint a second Supreme Court Justice. Anonymous sources from the White House have speculated potential candidate for this vacancy would include judge Diane Wood (Seventh Circuit Court of Appeals), judge Merrick Garland (D.C. Circuit Court of Appeals), and Elena Kagan (Supreme Court's first female Attorney General).

Materials for this blog were gathered from various sources including Wikipedia, Associated Press, The Washington Post, the New York Times, and Business Week. For more information, run a search on Google.

Robin Mashal is a Los Angeles business attorney, and a partner at the law firm of Hong & Mashal LLP. Mr. Mashal has been admitted to the bar of the United States Supreme Court. He can be reached by phone at (310) 286-2000.