Goldman Sachs Could be Sued for Helping Hide Greece's Debts: Report

[RiverLover]

Goldman Sachs Could be Sued for Helping Hide Greece's Debts: Report
7/11/15



ATHENS: If Greece follows the advice of a former Goldman Sachs banker, the global investment banking firm could face legal action for helping hide the European country's debts through complex transactions, a media report said on Saturday.

Jaber George Jabbour, who formerly helped design the transactions known as “swaps”, has offered help to the Greek government in a formal letter saying that it could “right historical wrongs as part of (its) plan to reduce Greece’s debt”, British daily The Independent reported.

The Syrian-born banker, who advises indebted governments battling investment banks over expensive complex derivative trades that turned sour, has told the Greek government in a formal letter that it has a chance of clawing back some of the money it paid Goldman to secure its position in the eurozone.

Jabbour has in the past assisted Portugal in restructuring some complex trades, which later helped uncover a scandal that cost many senior political officials their jobs.

According to the daily, Goldman Sachs banker Antigone Loudiadis stitched the swaps together, which made about 2 percent of Greece’s debt disappear from its national accounts.

Goldman swapped debt issued by Greece in dollars and yen for euros which were priced at a historical exchange rate that made the debt look smaller than it actually was, the report added.

The country's membership of the euro in 2001 gave it access to billions of easy credit which it was then incapable of paying back, leading to its current crisis....

http://www.newindianexpress.com/world/Goldman-Sachs-Could-be-Sued-for-Helping-Hide-Greeces-Debts-Report/2015/07/11/article2914811.ece

I hope they are sued, they deserve punishment. This also deserves exposure. I don't think most people realize how Goldman Sachs helped bring on Greece's debt, and crisis.

Another article on this, with more indepth info~

... The banking giant made as much as $500 million from the transactions known as "swaps", which translated Greek debts issued in dollars and yens into euros, the British daily says. The figure is, however, disputed by Goldman, which refuses to state an exact number. The deals were prepared by Antigone Loudiadis, who reportedly received $12 million a year for the job.

Now Loudiadis’ former colleague, Jaber George Jabbour, who used to design swaps at Goldman, sent a formal letter to the Greek government, saying it could “right historical wrongs as part of [its] plan to reduce Greece’s debt,” the report says.

Jabbour, who now runs Ethos Capital Advisors, had successfully assisted Portugal in renegotiating trades made during the financial crisis, resulting in major compensations paid by London banks to the country and a parliamentary investigation in Portugal. He also helped expose the alleged mismanagement of Libyan national assets by Goldman Sachs and Société Générale that reportedly resulted in billions in losses....

Jabbour believes Goldman received unreasonable profits from the swap deals and the Greeks can seek compensation for that. He also believes evidence may be produced that the sole purpose of the transactions was to cover the size of the Greek national debt and facilitate further borrowings.

http://rt.com/business/273208-greece-goldman-debt-lawsuit/

Goldman Sachs...the collective "man behind the curtain", pulling strings & making the world a more difficult place for most all.

[truebluegreen]

1. That would be priceless.

[lindysalsagal]

2. I just got this appeal from Moveon.org to get Obama to weigh in on Greece

It's from Robert Reich, so that makes it letgitate, to me. It's a little strange, because it's not about U.S. policy, laws, or our elected officials.

There's no online link: When you check the current campaigns, it's not on there.

People seem to forget that the Greek debt crisis—which is becoming a European and even possibly a world economic crisis—grew out of a deal with Goldman Sachs, engineered by Goldman's Lloyd Blankfein.
Several years ago, Blankfein and his Goldman team helped Greece hide the true extent of its debt—and in the process almost doubled it. When the first debt deal was struck in 2001, Greece owed about 600 million euros ($793 million) more than the 2.8 billion euros it had borrowed. Goldman then cooked up an off-the-books derivative for Greece that disguised the shortfall but increased the government's losses to 5.1 billion euros.

In 2005, the deal was restructured and the 5.1 billion euro debt was locked in. After that, Goldman and the rest of Wall Street pulled the global economy to its knees—whacking Greece even harder.

Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman Sachs isn't exactly innocent. It padded its profits by catastrophically leveraging up the global economy with secret, off-balance-sheet debt deals.

Did any of its executives ever go to jail? Of course not. They all got fat bonuses and promotions. Blankfein, now CEO, raked in $24 million in 2014 alone. Meanwhile, the people of Greece struggle to buy medicine and food.

Economists Thomas Piketty and Jeffrey Sachs also have weighed in, writing in The Nation that the results of European austerity in Greece have hit the vulnerable the worst—"40 percent of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50 percent."1
Debt restructuring must be part of any solution for economic reforms in Greece. But instead of doing that, the European powers have made eleventh-hour, draconian demands: slash pensions, privatize even more core state functions, and attack unions and workers' collective bargaining rights.2

The U.S. can help make things better (instead of worse, like Goldman Sachs did). In addition to diplomatic power, the U.S. has voting power in the International Monetary Fund—one of Greece's creditors.

President Obama and Secretary of the Treasury Jack Lew can use their pulpits and their votes to yield a positive and just outcome. The Greek parliament on Friday approved a new plan that Prime Minister Alexis Tsipras proposed, but so far the European parties aren't offering up the debt restructuring that's needed for a real solution and instead are demanding even more draconian austerity measures from Greece to even keep talking.

That's why I wanted to write you this note, to try and sift through what's going on and ask for your help on a special campaign that's pretty different from what MoveOn's done before.

As you can imagine, MoveOn hadn't budgeted for a big campaign to save Greece and reject global austerity. So I'm speaking up to help MoveOn raise the funds now.

[JonLP24]

3. Same thing in Libya

Goldman Sachs Sued for Selling Libya Billions in "Worthless" Options

Goldman Sachs, the Wall Street investment bank, is being sued in London for selling Libya “worthless” derivatives trades in 2008 that the country’s financial managers did not understand. Libya says it lost approximately $1.2 billion on the deals, while Goldman made $350 million.

At the time, the Libyan Investment Authority (LIA), which invests profits from the country’s oil and gas exports, had assets worth $60 billion under former dictator Muammar Gaddafi. Goldman Sachs convinced LIA to buy long-term call options on six companies: Allianz, a German insurance and investment company; Banco Santander, a Spanish bank; Citbank, a U.S. bank; Électricité de France, a French state utility; ENI, an Italian oil company; and UniCredit, an Italian bank.

What the Libyans did not understand was that if the stocks in these six companies did not rise, their investments would become worthless. Instead the LIA executives were taken in by a trip to Morocco as well as "small gifts, such as aftershaves and chocolates” and an offer of an internship for Mustafa Mohamed Zarti, the brother of the Libyan fund's deputy executive director, in Dubai and London.

“The unique circumstances allowed Goldman Sachs to take advantage of the LIA’s extremely limited financial and legal experience to deliberately exploit its position of influence and to take advantage in a way that generated colossal losses for the LIA but substantial profits for Goldman Sachs,” said LIA Chairman AbdulMagid Breish in a statement.

For example, LIA paid $200 million to gamble on the value of 22.3 million Citigroup shares. At the time, these shares were worth $5.7 billion and so long as they rose in value by at least $200 million, LIA stood to get its money back and the full value of the shares. But since Citigroup’s shares did not rise by at least $200 million, LIA lost its wager.

http://www.corpwatch.org/article.php?id=15922