Robalini's Note: This sounds like what the Carlyle Group did as well. Here's what I wrote in 2008: "Though Carlyle Capital has indeed gone belly up, its parent Carlyle Group - the private equity group whose partners have included George H. W. Bush and the bin Laden family, and whose founder, perhaps not-so-symbolically, bought the original copy of the Magna Carta for $20 million - has only been marginally damaged by the liquidation, as Carlyle Capital was an spin-off of mortgage securities. Did Carlyle suspect the mortgage market was doomed to sink over toxic subprime loans and thus create the spin-off, the first in its history, to dump a loser on sucker investors?"
http://rawstory.com/rs/2010/0416/charges-goldman-sachs-fraud/
SEC says Goldman defrauded investors of $1 billion
By John Byrne
Friday, April 16th, 2010
The Securities and Exchange Commission has charged investment banking titan Goldman Sachs with civil fraud over a pre-packaged mortgage instrument they say was designed to fail.
Goldman Sachs created the derivative -- called Abacus 2007-AC1 -- in response to a request from a hedge fund manager who predicted that the housing market would collapse and wanted to bet against it. The trader, John Paulson, later earned $3.7 billion for his wager. Goldman's practices cost investors $1 billion, according to the filing.
According to the New York Times, which first revealed details of the Abacus case, the instrument was among 25 Goldman created so that clients could bet against the housing market:
As the Abacus deals plunged in value, Goldman and certain hedge funds made money on their negative bets, while the Goldman clients who bought the $10.9 billion in investments lost billions of dollars.
Goldman let Mr. Paulson select mortgage bonds that he wanted to bet against — the ones he believed were most likely to lose value — and packaged those bonds into Abacus 2007-AC1, according to the S.E.C. complaint. Goldman then sold the Abacus deal to investors like foreign banks, pension funds, insurance companies and other hedge funds.
But the deck was stacked against the Abacus investors, the complaint contends, because the investment was filled with bonds chosen by Mr. Paulson as likely to default. Goldman told investors in Abacus marketing materials reviewed by The Times that the bonds would be chosen by an independent manager.
Apparently, they weren't.
Fabrice Tourre, a vice president at Goldman who helped design and market Abacus, was also named in the SEC suit.
84 percent of Abacus' mortgage bonds would be downgraded within five months of their sale. By the end of 2007, Paulson's credit hedge fund soared 590 percent, and Goldman's clients lost billions.
Goldman reportedly targeted specific mortgage bonds at Paulson's request that Paulson felt were most likely to lose their golden credit ratings, which would trigger a payout for his firm.
Goldman did not immediately comment on the suit. The company's shares fell more than 10 percent on the news.
Shareholder recently sued firm for huge bonus payouts
In January, a lawsuit filed against the investment bank by a shareholder alleged that the company spent more money on corporate bonuses than it earned in 2008.
Shareholder Ken Brown's lawsuit is one of two suits filed against the company over its controversial decision to hand out billions of dollars in bonuses even after it was accused of playing a central role in the financial collapse of 2008 and receiving $10 billion in direct aid from the US government.
In his lawsuit, Brown asserted that Goldman Sachs gave out $4.82 billion in bonuses in 2008, despite earnings of only $2.32 billion that year. The lawsuit alleges that the company spent 259 percent of its income in the first quarter of 2009 on compensation.
Goldman Sachs handed out $16.7 billion in compensation in the first nine months of 2009, according to Bloomberg News, and that figure may reach $22 billion for the entire year. Brown's suit says the company typically sets aside 44 percent of its net revenue for employees.
“Payment of this exorbitant amount of compensation, which has little to do with Goldman Sachs’s performance, and was financed in large part with government bailout and taxpayer money, is a waste of the company’s assets and a breach of duty and loyalty," Brown asserts in the suit.
Goldman CEO Lloyd Blankfein earned $9 million in a non-cash bonus for 2009. In prior years, he'd earned more than $20 million.
Showing posts with label Carlyle Group. Show all posts
Showing posts with label Carlyle Group. Show all posts
Sunday, April 25, 2010
Wednesday, March 19, 2008
Banks to Seize Carlyle Capital Assets
http://www.newsmax.com/money/carlyle_group_fund/2008/03/13/80141.html
Banks to Seize Carlyle Capital Assets
Thursday, March 13, 2008
NEW YORK -- The likely liquidation of Carlyle Capital Corp.'s remaining assets sent the fund's shares plummeting more than 90 percent Thursday and rattled stock markets around the globe. It was also a high-profile setback for private equity fund Carlyle Group.
Carlyle Capital said late Wednesday that it expected creditors to seize all of the fund's remaining assets _ investment-grade mortgage-backed securities _ after unsuccessful negotiations to prevent its liquidation.
Its shares, which went public at $19 a share in July and traded at $12 just last week, tumbled 93.6 percent to 18 cents on the Euronext exchange.
The Amsterdam-listed fund shook financial markets last week after missing margin calls from banks on its $21.7 billion portfolio of residential-mortgage-backed bonds. Carlyle's troubles have amplified fears that billions of dollars of depressed mortgage-backed securities will flood the market, reducing their value even further.
"Although it has been working diligently with its lenders, the company has not been able to reach a mutually beneficial agreement to stabilize its financing," Carlyle Capital said in a statement.
Carlyle's troubles heightened worries about the billions of dollars in depressed mortgage-backed securities, one factor that sent stock markets down. The Dow Jones industrial sank more than 200 points, following indexes in Asia and Europe lower.
The sell-off would mark a huge defeat for the Washington, D.C.-based Carlyle Group, one of the largest private equity firms in the world with $76 billion in assets. Carlyle Capital, registered in Britain but managed by New York-based executives, was the first of its 55 funds to go public.
Since the beginning of the credit crunch, Carlyle Group has extended loans to Carlyle Capital to help meet margin calls, including a $150 million revolving loan, Citigroup analyst Donald Fandetti told investors in a research note March 6. "It appears CCC is fully drawn on this line and so far no further loans have been provided."
Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC, said it didn't make sense for Carlyle Group to keep bailing out its mortgage-focused fund.
"If it's a standalone entity that's vulnerable to failure, then you let it go and you bear the consequences but you certainly don't throw good money after bad," Wilkinson said.
More than a year ago, the fund leveraged its $670 million equity 32 times to finance a $21.7 billion portfolio of AAA-rated residential mortgage-backed securities issued by Freddie Mac and Fannie Mae. It borrowed money from at least a dozen banks and firms, including Bank of America Corp., Citigroup Inc. and Merrill Lynch & Co.
Carlyle Capital posted the securities as collateral under repurchase agreements, so if the value of the securities fall, the lender has the right to ask for more collateral _ a margin call _ to secure the loan. If the borrower does not meet the margin call, the lender may sell the security.
The value of mortgage-backed securities has plummeted as U.S. home prices fall and foreclosures surge, prompting the banks to ask Carlyle Capital for more than $400 million in additional capital. The fund was unable to come up with the money, prompting lenders to start foreclosing on the securities.
As of Wednesday, Carlyle Capital said it has defaulted on about $16.6 billion of its debt, and the rest is expected to go into default soon. About $5.7 billion of the defaulted debt has been sold, the Carlyle Group said Thursday. Spokeswoman Emma Thorpe said she couldn't say what has been done with the rest.
Carlyle Group "participated actively" in the fund's negotiations with its lenders to refinance its portfolio and was prepared to provide substantial additional capital if sustainable terms could be achieved, the fund's statement said.
But hopes for refinancing fell apart after some lenders said the value of the collateral had declined further, which would result in additional margin calls Thursday of about $97.5 million.
Banks to Seize Carlyle Capital Assets
Thursday, March 13, 2008
NEW YORK -- The likely liquidation of Carlyle Capital Corp.'s remaining assets sent the fund's shares plummeting more than 90 percent Thursday and rattled stock markets around the globe. It was also a high-profile setback for private equity fund Carlyle Group.
Carlyle Capital said late Wednesday that it expected creditors to seize all of the fund's remaining assets _ investment-grade mortgage-backed securities _ after unsuccessful negotiations to prevent its liquidation.
Its shares, which went public at $19 a share in July and traded at $12 just last week, tumbled 93.6 percent to 18 cents on the Euronext exchange.
The Amsterdam-listed fund shook financial markets last week after missing margin calls from banks on its $21.7 billion portfolio of residential-mortgage-backed bonds. Carlyle's troubles have amplified fears that billions of dollars of depressed mortgage-backed securities will flood the market, reducing their value even further.
"Although it has been working diligently with its lenders, the company has not been able to reach a mutually beneficial agreement to stabilize its financing," Carlyle Capital said in a statement.
Carlyle's troubles heightened worries about the billions of dollars in depressed mortgage-backed securities, one factor that sent stock markets down. The Dow Jones industrial sank more than 200 points, following indexes in Asia and Europe lower.
The sell-off would mark a huge defeat for the Washington, D.C.-based Carlyle Group, one of the largest private equity firms in the world with $76 billion in assets. Carlyle Capital, registered in Britain but managed by New York-based executives, was the first of its 55 funds to go public.
Since the beginning of the credit crunch, Carlyle Group has extended loans to Carlyle Capital to help meet margin calls, including a $150 million revolving loan, Citigroup analyst Donald Fandetti told investors in a research note March 6. "It appears CCC is fully drawn on this line and so far no further loans have been provided."
Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC, said it didn't make sense for Carlyle Group to keep bailing out its mortgage-focused fund.
"If it's a standalone entity that's vulnerable to failure, then you let it go and you bear the consequences but you certainly don't throw good money after bad," Wilkinson said.
More than a year ago, the fund leveraged its $670 million equity 32 times to finance a $21.7 billion portfolio of AAA-rated residential mortgage-backed securities issued by Freddie Mac and Fannie Mae. It borrowed money from at least a dozen banks and firms, including Bank of America Corp., Citigroup Inc. and Merrill Lynch & Co.
Carlyle Capital posted the securities as collateral under repurchase agreements, so if the value of the securities fall, the lender has the right to ask for more collateral _ a margin call _ to secure the loan. If the borrower does not meet the margin call, the lender may sell the security.
The value of mortgage-backed securities has plummeted as U.S. home prices fall and foreclosures surge, prompting the banks to ask Carlyle Capital for more than $400 million in additional capital. The fund was unable to come up with the money, prompting lenders to start foreclosing on the securities.
As of Wednesday, Carlyle Capital said it has defaulted on about $16.6 billion of its debt, and the rest is expected to go into default soon. About $5.7 billion of the defaulted debt has been sold, the Carlyle Group said Thursday. Spokeswoman Emma Thorpe said she couldn't say what has been done with the rest.
Carlyle Group "participated actively" in the fund's negotiations with its lenders to refinance its portfolio and was prepared to provide substantial additional capital if sustainable terms could be achieved, the fund's statement said.
But hopes for refinancing fell apart after some lenders said the value of the collateral had declined further, which would result in additional margin calls Thursday of about $97.5 million.
New York Governor ‘Destroyed’ Over 9/11
http://www.whatdoesitmean.com/index1077.htm
March 11, 2008
New York Governor ‘Destroyed’ Over Threat To Probe 9/11 Attacks On US
By: Sorcha Faal, and as reported to her Western Subscribers
Reports consuming the US propaganda media organs and political elite today are centering upon the charges leveled against the Governor of New York, Eliot Spitzer, and who is said to have paid for the services of a high priced prostitute.
FSB reports circulating in the Kremlin today, however, point to a much more sinister effort behind the toppling of Governor Spitzer as he had just begun a new probe into Larry Silverstein, the owner of the World Trade Center brought down in the September 11, 2001 attacks upon the US, and the Bush Families Carlyle Group.
The focus of Governor Spitzer’s investigation, these reports state, revolve around the growing crisis embroiling the Carlyle Group as it nears total collapse and is facing insolvency due to Larry Silverstone’s withdrawal of over $14 billion from the embattled groups coffers, and which could see the loss to New York States already troubled massive pension fund of over $10 billion.
Governor Spitzer has long battled with the former comptroller for New York States Pension Fund, Alan G. Hevesi, who holds duel Israeli-American citizenship, and prompted a US Federal Probe that charged Comptroller Hevesi of using the over $100 billion of funds entrusted to him for the personal benefit of his friends and family, and to which Mr. Hevesi pled guilty for and paid a $5,000 fine.
Prior to his taking office as New York States Governor, these reports continue, Mr. Spitzer, as a prosecutor, had long targeted the United States Banking System for their vast theft of money from the American people, and had won billions in judgments against Bear Stearns, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, J.P. Morgan Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley, Salomon Smith Barney and UBS Warburg.
It is more than interesting to note, too, that these are the exact same International Banking Giants who are now reeling under the Global assault against them, with Bear Stearns becoming the latest victim, and as we can read as reported by Britain’s Independent News Service:
"Panic swept the credit markets on reports of an insolvency crunch at both the US investment bank Bear Stearns and the mortgage giant Fannie Mae, triggering a dramatic surge in default insurance and rumours of yet another emergency rate cut by the US Federal Reserve."
As Governor Spitzer becomes yet another victim to vast power of the West’s war, political and media elite assault against him, and by their introduction of sex charges against him, as they have done to so many of their adversaries in order to destroy their credibility, the truest warnings of these events to the American people will no doubt be lost, again.
And, with the most dangerous of these warnings coming from the World’s richest man, Warren Buffet, and as we can read as reported by the Market Watch News Service in their article titled "Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen", and which says:
"In short, despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.
Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier's window at a racetrack or casino, where you'd place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy."
There used to be a time when warnings were prudent to be given to the American people so that they could, in some small measure, protect themselves, but, and sadly, those times are now gone as these people have nearly completed their descent into the abyss of total slavery to their masters with virtually no knowledge of the horrific future that lies before them.
March 11, 2008
New York Governor ‘Destroyed’ Over Threat To Probe 9/11 Attacks On US
By: Sorcha Faal, and as reported to her Western Subscribers
Reports consuming the US propaganda media organs and political elite today are centering upon the charges leveled against the Governor of New York, Eliot Spitzer, and who is said to have paid for the services of a high priced prostitute.
FSB reports circulating in the Kremlin today, however, point to a much more sinister effort behind the toppling of Governor Spitzer as he had just begun a new probe into Larry Silverstein, the owner of the World Trade Center brought down in the September 11, 2001 attacks upon the US, and the Bush Families Carlyle Group.
The focus of Governor Spitzer’s investigation, these reports state, revolve around the growing crisis embroiling the Carlyle Group as it nears total collapse and is facing insolvency due to Larry Silverstone’s withdrawal of over $14 billion from the embattled groups coffers, and which could see the loss to New York States already troubled massive pension fund of over $10 billion.
Governor Spitzer has long battled with the former comptroller for New York States Pension Fund, Alan G. Hevesi, who holds duel Israeli-American citizenship, and prompted a US Federal Probe that charged Comptroller Hevesi of using the over $100 billion of funds entrusted to him for the personal benefit of his friends and family, and to which Mr. Hevesi pled guilty for and paid a $5,000 fine.
Prior to his taking office as New York States Governor, these reports continue, Mr. Spitzer, as a prosecutor, had long targeted the United States Banking System for their vast theft of money from the American people, and had won billions in judgments against Bear Stearns, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, J.P. Morgan Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley, Salomon Smith Barney and UBS Warburg.
It is more than interesting to note, too, that these are the exact same International Banking Giants who are now reeling under the Global assault against them, with Bear Stearns becoming the latest victim, and as we can read as reported by Britain’s Independent News Service:
"Panic swept the credit markets on reports of an insolvency crunch at both the US investment bank Bear Stearns and the mortgage giant Fannie Mae, triggering a dramatic surge in default insurance and rumours of yet another emergency rate cut by the US Federal Reserve."
As Governor Spitzer becomes yet another victim to vast power of the West’s war, political and media elite assault against him, and by their introduction of sex charges against him, as they have done to so many of their adversaries in order to destroy their credibility, the truest warnings of these events to the American people will no doubt be lost, again.
And, with the most dangerous of these warnings coming from the World’s richest man, Warren Buffet, and as we can read as reported by the Market Watch News Service in their article titled "Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen", and which says:
"In short, despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.
Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier's window at a racetrack or casino, where you'd place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy."
There used to be a time when warnings were prudent to be given to the American people so that they could, in some small measure, protect themselves, but, and sadly, those times are now gone as these people have nearly completed their descent into the abyss of total slavery to their masters with virtually no knowledge of the horrific future that lies before them.
Sunday, December 23, 2007
Magna Carta bought for $21m by US tycoon
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article3070798.ece
December 19, 2007
Magna Carta bought for $21m by US tycoon
James Bone in New York
The only copy of Magna Carta in private hands sold for $21.32 million (£10.6 million) this morning in the first auction of the “birth certificate of freedom”.
The 1297 example, described as the most important document to come up for sale, was acquired by David Rubenstein, the founder of the Carlyle Group, at Sotheby’s in New York. He has paid $8,528 a word.
Sotheby’s had put a pre-sale estimate on the document of $20-$30 million.
The 14in-by-16in (35.6cm-by40.6cm) sheet of animal-skin vellum is one of only 17 originals of the founding “Great Charter” of English liberties first signed by King John at Runnymede — near present-day Staines, Surrey — in 1215.
The document established the principle of habeas corpus, which protects people against unlawful imprisonment by ensuring such rights as trial by jury and freedom from unlawful arrest.
Clause 39 proclaims: “No free man shall be taken or imprisoned or disseised or outlawed or exiled or in any way ruined, nor will we go or send against him, except by the lawful judgment of his peers or by the law of the land.”
Four of the surviving 17 copies date from the reign of John, eight from that of Henry III and five from that of Edward I. The Sotheby’s example bears the wax seal of King Edward I hanging from a ribbon at the bottom of the parchment — one of only five that still carry the royal seal.
1297 was the year that Magna Carta was formally entered into the statute rolls as the law of England. It came into being as a result of a dispute between King John and the English barons and went some way towards limiting the authority of the king.
The only other original outside Britain was a gift by the country to “The People of Australia”. It is on display at the Parliament in Canberra.
Mr Rubenstein, the founder of the Carlyle private equity group and a former deputy domestic policy adviser to President Carter, said that he would put the document back on public view at the National Archives in Washington, where it had been on loan.
“I thought it was very important that the Magna Carta stay in the United States, and I was concerned the only copy in the United States might escape the United States as a result of this auction,” he said.
“I am a person who has served in government myself. I worked in the White House as a young man. At that time I recognised the importance of these kind of documents and the importance of freedom.”
He admitted that he could not actually read it because he had avoided learning Latin at school — a decision he now regrets.
The 2,500-word document, written in medieval Latin, was put up for sale by the Texan software billionaire and two-time independent presidential candidate Ross Perot.
Mr Perot acquired it for $1.5 million in 1984 from relatives of James Thomas Brudenell, the 7th Earl of Cardigan, who led the Charge of the Light Brigade during the Crimean War. Magna Carta had been at the Brudenells’ family seat at Deene Park, Northamptonshire, for more than half a millennium.
In a catalogue essay Professor Nicholas Vincent of the University of East Anglia theorises that the Brudenells obtained it in Buckinghamshire after William Brudenell, the founder of the family’s fortunes, married an heiress there during the reign of Edward III.
After displaying Magna Carta at Independence Hall in Philadelphia, Mr Perot loaned it to the US National Archives in Washington, where it has been seen by a million people.
“It’s in remarkable condition for a document that dates from 1297,” Chris Rudy Smith, an archivist at the institution, said before the sale.
Proceeds of the sale will go to Mr Perot’s foundation to make funds available for medical research and care for wounded military veterans.
$8,528
Or £4,233 — the cost per word of buying the only edition of Magna Carta in private hands. A copy of J. K. Rowling’s The Tales of Beedle the Bard was sold at auction for £1.9 million last week, or for £363.64 a word
Source: Times database
December 19, 2007
Magna Carta bought for $21m by US tycoon
James Bone in New York
The only copy of Magna Carta in private hands sold for $21.32 million (£10.6 million) this morning in the first auction of the “birth certificate of freedom”.
The 1297 example, described as the most important document to come up for sale, was acquired by David Rubenstein, the founder of the Carlyle Group, at Sotheby’s in New York. He has paid $8,528 a word.
Sotheby’s had put a pre-sale estimate on the document of $20-$30 million.
The 14in-by-16in (35.6cm-by40.6cm) sheet of animal-skin vellum is one of only 17 originals of the founding “Great Charter” of English liberties first signed by King John at Runnymede — near present-day Staines, Surrey — in 1215.
The document established the principle of habeas corpus, which protects people against unlawful imprisonment by ensuring such rights as trial by jury and freedom from unlawful arrest.
Clause 39 proclaims: “No free man shall be taken or imprisoned or disseised or outlawed or exiled or in any way ruined, nor will we go or send against him, except by the lawful judgment of his peers or by the law of the land.”
Four of the surviving 17 copies date from the reign of John, eight from that of Henry III and five from that of Edward I. The Sotheby’s example bears the wax seal of King Edward I hanging from a ribbon at the bottom of the parchment — one of only five that still carry the royal seal.
1297 was the year that Magna Carta was formally entered into the statute rolls as the law of England. It came into being as a result of a dispute between King John and the English barons and went some way towards limiting the authority of the king.
The only other original outside Britain was a gift by the country to “The People of Australia”. It is on display at the Parliament in Canberra.
Mr Rubenstein, the founder of the Carlyle private equity group and a former deputy domestic policy adviser to President Carter, said that he would put the document back on public view at the National Archives in Washington, where it had been on loan.
“I thought it was very important that the Magna Carta stay in the United States, and I was concerned the only copy in the United States might escape the United States as a result of this auction,” he said.
“I am a person who has served in government myself. I worked in the White House as a young man. At that time I recognised the importance of these kind of documents and the importance of freedom.”
He admitted that he could not actually read it because he had avoided learning Latin at school — a decision he now regrets.
The 2,500-word document, written in medieval Latin, was put up for sale by the Texan software billionaire and two-time independent presidential candidate Ross Perot.
Mr Perot acquired it for $1.5 million in 1984 from relatives of James Thomas Brudenell, the 7th Earl of Cardigan, who led the Charge of the Light Brigade during the Crimean War. Magna Carta had been at the Brudenells’ family seat at Deene Park, Northamptonshire, for more than half a millennium.
In a catalogue essay Professor Nicholas Vincent of the University of East Anglia theorises that the Brudenells obtained it in Buckinghamshire after William Brudenell, the founder of the family’s fortunes, married an heiress there during the reign of Edward III.
After displaying Magna Carta at Independence Hall in Philadelphia, Mr Perot loaned it to the US National Archives in Washington, where it has been seen by a million people.
“It’s in remarkable condition for a document that dates from 1297,” Chris Rudy Smith, an archivist at the institution, said before the sale.
Proceeds of the sale will go to Mr Perot’s foundation to make funds available for medical research and care for wounded military veterans.
$8,528
Or £4,233 — the cost per word of buying the only edition of Magna Carta in private hands. A copy of J. K. Rowling’s The Tales of Beedle the Bard was sold at auction for £1.9 million last week, or for £363.64 a word
Source: Times database
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