Monday, August 31, 2009



The Federal Government Claims That Goldman Has Stock Manipulation Software

The NYT had a bizarre piece in which it reported on the FBI's arrest of a former Goldman Sachs employee because he allegedly stole software from Goldman Sachs which the article says a federal prosecutor claims: "could be used to 'unfairly manipulate' stock prices."

The article is peculiar because it focuses on the intellectual property issues between Goldman and a former employee who had worked on developing the software. It almost completely ignores the more basic issue that the federal government effectively claims that Goldman Sachs has software that can be used to manipulate stock prices. If the software can be used for illegal purposes, why is it more serious that a relatively low level employee has access to it than Goldman Sachs' top executives?

--Dean Baker

Posted by Dean Baker on August 24, 2009 5:13 AM | Permalink

this software is for their 30 millisecond advantage. All it does is manipulate stock prices, that's what it's for.
remember high-speed trading?

High Frequency Trading Is A Scam
http://market-ticker.denninger.net/archives/1259-High-Frequency-Trading-Is-A-Scam.html

Posted by: darue | August 24, 2009 12:21 PM

Well I am with liberal. The early reporting on this software theft was coincident with the reporting that Goldman-Sachs had emerged from the financial crash with some stunningly better profits than most of its rivals. Take this article from Bloomberg on July 14.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2jo3RK2_Aps
Goldman Sachs Group Inc. posted record earnings as revenue from trading and stock underwriting reached all-time highs less than a year after the firm took $10 billion in U.S. rescue funds.

Second-quarter net income was $3.44 billion, or $4.93 a share, the New York-based bank said today in a statement. That surpassed the $3.65 per-share average estimate of 22 analysts surveyed by Bloomberg and was 65 percent higher than last year’s second quarter.

Chief Executive Officer Lloyd Blankfein, after repaying the government’s bailout money along with $426 million in dividends to taxpayers, is reverting to a business model analysts deemed irretrievably broken during the global credit crisis. While rivals including Morgan Stanley have pared risks, Goldman Sachs has increased them this year. Not everyone was shy in suggesting that those "increased" risks were mitigated by this propietary software that allowed G-S to front-run trading. But the non-bashful people seemed to be confined to the blogosphere and never seemed to see the light of day at the WSJ, the WaPo or Bloomberg. Even the article linked doesn't hint at the reality that darue and others here see so clearly.

Goldman-Sachs is suing because an employee stole their theft machine. It seems to be as simple as that.

Posted by: Bruce Webb | August 24, 2009 1:31 PM

... and patented the theft machine too, LOLOLOL ...


# posted by intcoex : 8:40 PM




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