The Short of It – A Few Thoughts About the Developing Goldman Sachs Stolen Trade Secrets Scandal
July 7th, 2009
Today, I’m starting a new feature on my blog called “The Short of It”. Often, my daily responsibilities don’t allow me the time to blog here as often as I would like. Thus, I’ve decided to write more frequent posts called “The Short of It” on days when my spare time is at a premium. “The Short of It” will stay true to our goal of bringing you news and perspectives on news not offered nor distributed by the mainstream financial media. However, this feature, which may morph into a daily feature, will consist of a much condensed version of my regular posts, and sometimes I’ll post something in this feature that may just raise questions about oddities and anomalies in the global markets.
Consider, the story about Goldman Sachs and the theft of its trade secrets last week. Bloomberg reported the following just this week on this breaking story:
Sergey Aleynikov, an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said. Aleynikov, 39, who has dual American and Russian citizenship, is charged in a criminal complaint with stealing the trading software. At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov’s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.
“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said (emphasis mine), according to a recording of the hearing made public today. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”The prosecutor added, “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.” The proprietary code lets the firm do “sophisticated, high-speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.
It’s curious to note that Goldman Sachs has admitted that it has developed trading software that could be used to, in their own words, “manipulate markets in unfair ways”, yet nobody in the mainstream media has questioned whether Goldman Sachs was/and is using its proprietary trading platform to manipulate markets in unfair ways. Only extremely naive investors with zero understanding of how global stock markets operate would deny that there has been continual and excessive intervention into US stock markets to prop them up over the past several months. The announced breach of Goldman Sach’s trade secrets coincided with an inexplicable omission of Goldman Sachs from the NYSE’s weekly report of the most active trading programs for the week ending June 26, 2009, though on Monday, July 6, 2009, a NYSE spokesman explained to Reuters that “the exchange was to blame for Goldman missing from the list, adding the bank reported its data to the exchange correctly and on time.” Even if this fishy explanation regarding the omission of Goldman Sachs’s trading activity from this weekly report is true, Goldman Sachs in light of this recent development, has undoubtedly had to proceed much more cautiously with their trading activities given that there may be unknown persons out there privy to their every move right now.
What is highly curious, in my mind, is the fact that oil plunged 10.5% from a high of $71.60 to a low of $64.05 in just the last four trading days and the fact that US stock markets plummeted on July 2nd, before a major US holiday weekend, at a time when Goldman Sachs has most likely not been participating in markets at their regular activity level given these recent developments. Typically before a major US holiday, trading volume on US markets is very light. During the recent rally in US markets from early March to early June, unidentified institutions have taken advantage of very low trading volumes to prop up US markets whereas higher than normal trading volumes often resulted in an aberration of a heavy down day. I fully expected July 2nd, due to the low trading activity that normally accompanies a pre-holiday market, to be a day when US markets would be propped up, yet July 2nd was a very heavy down day in US markets. Secondly, every trader recognizes the importance of Goldman Sachs’s activity in crude oil markets. In fact, if Goldman Sachs makes significant changes to the weightings of its GSCI (Goldman Sachs Commodity Index) components, virtually every commodity fund manager in America accordingly changes the weightings of his or her portfolio to mirror the changed weightings of the GSCI. I’m haven’t researched how many times in recent history that the price of oil has plunged 10.5% in four trading days, but I’m guessing not too often.
Could stock and select commodity markets actually have been driven more by the free market forces of supply and demand than by market manipulation and by free-market intervention schemes for several days while “the invisible hand” of Goldman Sachs has been temporarily tied behind its back? Just a thought.
e
Entry Filed under: U.S. Stocks
5 Comments Add your own
1. Bill | July 10th, 2009 at 7:28 am
I also wonder? Why , before the “cat code” was let out of the bag, were there 1-2% daily swings in the markets ( usually up) , but now this week only partial % moves for the day , each day . Something smells very fishy here . If its obvious to a financial tyro like myself , it should be GLARINGly obvious to the SEC and other Fed authorities . Are they turning a blind eye ? I suspect so . I’d like to see some bankers blood personally ( figuratively) G.S.’s in particular
2. Geldof | July 11th, 2009 at 12:31 am
That the SEC and FED are silent is not surprising. That none of GS’ competitors or major hedge funds who lost money on high frequency program trading are silent is even more fascinating. But we probably won’t ever know the truth on whether GS was manipulating oil and stock prices or whether they were alone in doing so. Alot of wall street firms have co-located facilities close to or next to the major stock exchanges around the world and offer many big hedge funds some form of direct access to clearing servers. As another well-known blogger commented, the worst GS would receive is a $5m fine and a slap on the wrist, and the commodities and stock markets would be back to “normal”. And I suspect apart from the investors left out of the current “green shoot” rallies simultaneously across all asset classes, why should anyone else complain?
3. RKeane | August 30th, 2009 at 6:13 pm
Rick Aristottle Munariz of the Motley Fools is paid to mislead investors about Sirius XM Radio. He is part of a news media collusion lead by CNBC and their own Jim Cramer. Jim Cramer’s street.com web site is also hip deep into the collusion. Jim Cramer and his writers, especially Scott Moritz are all part of the scandal and it leads upward to CNBC/GE executives and Goldman Sachs. Thank god their is now an investigation taking place with Goldman Sachs. Goldman Sachs was investigated and 10 firms, including Goldman Sachs were fined $1.4 Billion dollars in 2003. Now the full blown investigation by Boston’s Chief Financial Regulator William Galvin will reveal the corruption of Goldman Sachs again and I can only hope that William Galvin will follow the money trail and check the bank accounts of Rick Aristottle Munariz of the Motley Fools along with Scott Moritz of the Street.com Just check these 2 writers banking accounts and the investigation will reveal that they are being paid off to write mis-leading stories about Sirius XM Radio. The money trail from these 2 writers will lead to >>> Motley Fools >>> Street.com >>> Jim Cramer >>> CNBC >>> GE / CNBC executives >>> NAB >>> Goldman Sachs.
It has all been a news media collusion along with the combination of Wall Street corruption by Goldman Sachs to destroy Sirius XM Radio inc. by naked short selling, flash trading, superfast computers, using secret software to manipulate the Sirius XM Stock price in decimal places the past few years since the Siri /XM merger was announce in Jan 2007. It was a pact agreed to by the news media and Goldman Sachs, which is why CNBC keeps reporting positive story after positive story about Goldman Sachs. All are into this collusion knee deep and this is why they will not report Goldman Sachs and their biggest scandal in the history of Wall Street.
Goldman Sachs got greedy. The scandal with Sirius XM Radio, worked so well with their secret software that was making them millions of dollars a day. Well, their Greed expanded into not just naked shorting & decimal place trading Sirius XM radio, but Goldman Sachs, next said , heck this secret software works so well, along with CNBC’s cover up lets do it to our competition the banking industry. Goldman Sachs next used these tactics on the banking industry in 2008 – 2009. They have been protected by CNBC by paying CNBC millions of dollars a month in advertising or shall we say paid protection.
Goldman Sachs greed almost ruined this country when they began using naked shorting and their secret software to attack the banks. It was their Greed of making millions using this software attacking Sirius XM Radio and when they expanded their scandal to the banking industry, they were now making over $100 million dollars a day. This is a fact, as Goldman Sachs made over $100 million dollars a day in 46 of 64 trading days last Quarter 2009 ( April , May, June 2009 ).
CNBC is part of the scandal, taking in million a months from Goldman Sachs for their silence. Why wouldn’t Goldman Sachs pay CNBC millions of month, that was nothing to them, since they are making over $100 million dollars a day. They helped CNBC try to ruin the competition ( Siri ) and now CNBC will help them ruin the other Banks. A true partnership by Goldman Sachs & CNBC.
The scandal lives on today, but thankfully the investigation by William Galvin will be expanded into the news media collusion of CNBC, Motley Fools & Street.com along with many other news media types.
Their Greed and goals have cost the average investors of the World hundreds of billions of dollars the past few years. In the end the truth is going to come out, but how does the people of the World hear the truth when the news media is part of the Scandal.
Well, a few years ago, CNBC & Goldman Sachs would have gotten away with it, but thank you http://www.Satwaves.com , http://www.twitter.com/stockshockmovie and the many social media outlets and bloggers out there. Thank you for helping bring the truth to the World. Each day we get closer and closer to the biggest scandal in the history of the United States. ( Written by Richard Keane – August 30th, 2009 )
4. RKeane | September 2nd, 2009 at 6:25 pm
Hello,
Here is a press release that came out today Sept 2nd, 2009. It also has a few photos on it and a 12 second video of me.
please check out the link http://www.24-7pressrelease.com/press-release/white-house-curious-about-movie-stock-shock-114735.php
Richard Keane, narrator Stock Shock
5. J.S. | September 8th, 2009 at 3:15 pm
Thanks for the link to Stock Shock. We’ll be sure to check it out!
Leave a Comment
Trackback this post | Subscribe to the comments via RSS Feed