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Press Release
For Immediate Release
24 APRIL 2010
Salisbury, NC----Sam Turner, candidate for US House District 6, has requested the US Justice Department begin a Racketeer, Influenced, and Corrupt Organizations (RICO) investigation of Goldman Sachs investment bank. His request comes on the heels of federal civil charges filed by the Securities Exchange Commission (SEC) against Goldman Sachs.
In the case, a Goldman Sachs employee has been accused of not disclosing that hedge fund Paulson & Co was allowed to select the underlying securities that made up the mortgage investment marketed by Goldman Sachs as Abacus. Paulson & Co immediately began betting against Abacus and reportedly earned $1 Billion on those bets. There is also a probe into Goldman Sachs Director Rajat Guptas’ alleged involvement in the Galleon insider trading case
Turner explained Goldman Sachs meets the criteria for initiating a RICO investigation. John Youngdahl, a Goldman Sachs economist, pled guilty to fraud charges in 2004 for tipping off Goldman Sachs bond traders to the ending of 30 year bond sales.
Prior to being sentenced he said “There was an annual bonus procedure, and it was my expectation that the bonus could be enhanced.''
Goldman Sachs research analyst Eugene Plotkin was convicted of insider trading on upcoming stock mergers in 2006. According to Turner, under the RICO statutes even if Goldman Sachs was unaware of the actions of its employees, if two securities offenses are committed by Goldman Sachs employees within ten years that is enough to trigger a RICO investigation.
Turner further states the American public has become aware of the extent to which former Goldman Sachs personnel have positioned themselves in branches of the American financial regulatory system. The past and current head of the New York Federal Reserve are both former Goldman Sachs employees. The New York Federal Reserve is the banking regulator for Wall Street. The head of the Commodities Futures Trading Commission is a former Goldman Sachs employee. The agency he heads sets policy for the financial instruments hedge fund Paulson & Co used to bet against Abacus. The former Secretary of the Treasury, Hank Paulson, is a former CEO of Goldman Sachs. The current Secretary of the Treasury’s Chief of Staff is the former chief lobbyist for Goldman Sachs in Washington, DC. The Chief Operating Officer of the SEC is a former Goldman Sachs employee. He highlights that even the former head of the Federal Reserve, Alan Greenspan, was employed by the very hedge fund that was a part of the alleged Goldman Sachs-Abacus scheme.
Turner said “The actions of Goldman Sachs need to undergo the scrutiny of an in-depth RICO investigation by the Justice Department. This RICO investigation will either expose wrongdoing or restore the confidence of the American public in federally insured Goldman Sachs and the federal financial regulatory system”.
He also doubted the SEC’s ability to perform a RICO investigation because it doesn’t have the resources available to the Justice Department. The SEC only has an annual budget of $1 Billion which is a fraction of the $21 Billion Goldman Sachs paid out in bonuses in 2009. You can view his letter at his website: http://www.samturnerforcongress.com/blog/blog.html
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