These investment bankers almost ruin our economy and they're still acting like it's 2007. Have they no shame?
If you missed the latest news that former Goldman Sachs (NYSE: GS) Vice President Neil M. M. Morrison was fined a record $100,000 by the SEC and barred from the securities business for five years for breaking municipal securities rules, don't feel bad.
The news didn't make it into many newspapers.
And sadly, that's because there's nothing newsworthy about greed and corruption on Wall Street.
Here's what Morrison did wrong, besides getting caught. And what his former firm Goldman Sachs said about him after they threw him under the bus, then fired him because he got caught doing what he did.
It's kind of like the intro to "Mission Impossible" episodes and movies when the agent receives the assignment, and the message ends saying, "Of course, if you are caught, we will disavow having any knowledge of you or your mission," then self-destructs.
Neil Morrison, 38 years old, started as a vice president of Goldman Sachs in July 2008. As a municipal finance executive in Goldman's Boston office, Morrison's job was to bring in municipal underwriting business, including the Massachusetts Treasurer's office.
Goldman "trained" Morrison on the ins and outs of gathering municipal underwriting business, the rules, regulations and laws governing municipal financing and underwriting standards, as well as Goldman's own internal policies.
Killing the Interview, Goldman-style
Fortunately for Morrison, he had friends in high places. This is pure speculation on my part, albeit educated speculation, but Goldman likely knew, perhaps from the interviewing process for which Goldman is so famous, that Morrison was well-connected.
From November 2008 until October 2010 Morrison, by a stroke of good fortune, worked for then-Massachusetts Treasurer Timothy P. Cahill on his gubernatorial campaign.
Morrison's portfolio on behalf of the aspiring governor included fundraising, fundraising solicitation, writing position papers, speechwriting, prepping the candidate for press conferences, interviewing consultants and rendering legal advice.
Morrison didn't get paid by Cahill, and he didn't contribute money to the candidate's campaign efforts.
But there's little doubt that Morrison and his employer expected his "in-kind" contributions to be remunerated by the then-treasurer and possibly future governor, by throwing a little municipal underwriting business his way.
It turns out that the 364-plus e-mails from Morrison's Goldman Sachs office computer and all his other campaign efforts for the treasurer, many of which were orchestrated from the Goldman office, were to no avail.
But that didn't mean Morrison's efforts were in vain. During the time Morrison was contributing his energies to Cahill's campaign, Cahill steered more than $9 billion of underwriting business to Goldman Sachs. The firm profited by some $7.5 million in fees.
Cost of Doing Business
Well, it turns out that there's a law against that kind of back scratching. It's called "pay-to-play" and it's illegal.
Morrison didn't think he was doing anything wrong, but Goldman was surprised, to say the least.
Once it was found out that Morrison and Goldman were being investigated, Goldman fired Morrison. Goldman said, "Neil Morrison violated applicable regulatory rules as well as Goldman Sachs' internal policies. We detected his activities, promptly alerted regulators, terminated his employment, and fully cooperated with investigations."
Of course, it never occurred to Goldman that Morrison was doing his job in a way that they expected him to and he simply got caught. Then, with their own hands soiled, Goldman promptly sought a settlement of the matter without admitting or denying guilt and paid a piddling $14.4 million fine.
As far as Morrison, he bore the brunt of the punishment, not by the "record" $100,000 fine (tip money for a Goldman banker), but by being barred from the securities milk run business for five years.
But then again, it was only ever a civil matter. These crimes are never criminal matters, when big money and big politics are involved.
Maybe the word criminal, as in one who commits a crime (things there are laws against), should be changed to "civilinal" so as to not offend hardworking white-collar criminals.
Related Articles and News:
- Money Morning:
The Great Rotation Makes Stocks a Generational Buy
- Money Morning:
The Next Bank Meltdown Won't Be an "Accident"
- Money Morning:
What You Absolutely Need to Know About "Their Paper Money"
- Money Morning:
What Everyone Absolutely Needs to Know About Money
About the Author
Shah Gilani is Chief Financial Strategist for Money Map Press and boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker. The work he did laid the foundation for what would later become the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk and established that company's "listed" and OTC trading desks. Shah founded a second hedge fund in 1999, which he ran until 2003. Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see. On top of the free newsletter, as editor of The 10X Trader, Money Map Report and Straight Line Profits, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade using a little-known strategy. Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on FOX Business' "Varney & Co."