Wednesday, January 19, 2011
Goldman's option grant timeline
On November 9, 2008 our Government decided to bail out AIG's counterparties, and one of the chief counterparty beneficiaries was Goldman Sachs.
On December 17, 2008, Stephen Freidman, chairman of the board of the New York Federal Reserve Bank, and a member of the board of directors of Goldman Sachs bought 37,000 shares of Goldman Sachs for about $3 million.
During the House Oversight Committee you had this conversation regarding Stephen Freidman:
Committee chair Edolphus Towns
"At a time when Mr. Friedman was prohibited from owning Goldman Sachs stock, he proceeded to buy 37,000 more shares of it anyway." "That strikes many Americans as unjust, unwise and unfair."
"Here's the problem...As a member of the board of governors you're making decisions on matters that directly affect Goldman Sachs, and you're a former shareholder, current shareholder, and then you buy 37,000 more shares of that company that you're overseeing?"
Friedman was "obviously in a position of extreme conflict and was given full opportunity for inside trading." "I mean, think about it." "He asks for a waiver; he knows there's a conflict. Then he gets the information that the Fed is going to pump this money into AIG and the positions are going to be covered 100 cents on the dollar. And so with that information, what would you do? Buy another 37,000 shares, baby."
Freidman had to resign.
Now let's go and look at Goldman's latest money grab. In the NY Times, yesterday, it was shown that on December 8, 2008 Goldman Sachs awarded 36 million option grants to it's partners at $78.78 a share, after Goldman Sachs was bailed out by AIG, and 8 days before this bailout was announced in Goldman's December 16 earnings report. This option grant was 10X the amount of the previous year, and it was 1000X the amount of shares that Stephen Freidman had purchased--the same conflicted purchase which caused him to resign!
To paraphrase Gene Simmons, "It's good to be Goldman!"
Posted by Palmoni at 11:30 AM