Imagine an investment bank, open for business since 1869, that is 149 years. Managing Trillions of dollars, taking tens of thousands of companies public, having its executives serve as Treasury Secretaries of The United States Of America, have its executives indicted in fraud cases upon fraud cases, insider trading charges brought against and proven, billions of dollars in fine paid for fraud, the biggest one ever ordered to be paid in lump sum ever, $5 billion for mortgage fraud that caused the 2018 world financial crisis, pay $120 million for fraud in commodities, pay $109 million for violations in Forex Trading, have its Board Member arrested and sent to jail for insider trading, getting fined by The Federal Reserve for $54 million for risking clients funds, pay another $50 million in fines for failing to supervise its staff, and the list is never ending, but it boast on its website and in its PR material, the greatness of the firm as the “Greatest” thing since sliced bread.
Perhaps it is the greatest. Greatest at getting away with a murder and continue to murder. Perhaps the greatest in making billions in illegal transactions and paying just a fraction in fines. Perhaps the greatest in having the best evil minds that come up with genius schemes to swindle the small investors and benefit the large ones and share the loot together.
My personal experiences aside with this entity and my years of dealing with them, until it all dawned upon me that, metaphorically speaking, The Rabbi himself is the perpetrator of anti Semitism. So let’s just go by facts that are publicly available. Facts that point to a history of manipulation, deceit, fraud, fines, arrests, indictments—-all in the name of—“We are the biggest and the oldest firm on Wall Street”.
Every time there is a new product in the financial markets, from a derivative to a hedge fund, to a Sub-Prime Mortgage to a newly invented class of speculation, Crypto Currency, oh did I say Crypto Currency ? I guess I did.
But did not Goldman just announce yesterday that it will not open up a Crypto Trading desk, just yesterday ?
That is the exact point. This announcement is nothing but another manipulation, at least in my view. Months ago when Bitcoin and other Cryptos were trading lower, Goldman had announced that it will establish a Crypto Trading desk. Of course the news caught on like jungle fire. And there was a bull run based on the news. In my opinion, it would be extremely difficult for me to digest that GS did not benefit from the bull run being long. Riding the run all the way to its top.
First of all, firms like Goldman do not announce establishing a new desk randomly.
A new “Desk” means an entirely new division of an investment bank. And the older the IB, the more difficult to make room for a new division. Almost an uphill task to create a new division, specially for a newly introduced class of investments, in this case “Cryptos”. Once you announce, you never, and I say never because I have never seen a cancellation of an announcement about a new division in my career and have never heard of a cancellation announcement of a new division within months of its original announcement.
It is not illegal to announce or even cancel the
announcements. What is illegal is the trading activity based on it. Long before
announcing the establishment of a new desk, then sell it all and go short
before cancelling the announcement. Profit both ways.
If not profited themselves than it should fall in the category of “Fiduciary Mismanagement” effecting the common investors of that asset class who would be losing money based on such tactics.
I do not own a single Crypto Currency. Never did. But the
ones who do are crying today because the markets have lost billions of dollars
overnight after the announcement of the cancellation.
The words of my first boss at The Prudential Financial Services, on Wall Street, still echo in my ears today… “Wall Street is a den of thieves, and the smartest crook wins”.
I guess some of us will never be that smart. And thank God for little favors.
Author: Mir Mohammad AliKhan