We have been tracking the buddy club story for the past two years and have caught several firms in the act including Smith Barney, CSFB, and Merrill. Now we have a new member of the buddy club, Goldman Sachs. It is now evident that the buddy system was in full effect at Goldman Sachs. Top executives at 21 companies personally received hot IPO shares from their good old pals at Goldman Sachs. The data we uncovered further demonstrates how widespread the corruptions in IPO allocations are.
What did Goldman get?
If you have been a regular reader of the Markowski Monthly or a faithful member of our Watchdog on Wall Street audience you know the answer to this one. Simply put, investment banking deals and huge fees. For example: Goldman has made $57 million in fees from Tyco, Global Crossing paid out $45 million, and Enron paid $19 million. That is just to name a few.
Some of the good buddies of Goldman Sachs who reaped enormous profits include these infamous corporations: WorldCom, E-Toys, Tyco, Enron, Global Crossing, Planet RX and TheStreet.com. Of the 22 Goldman led IPO’s given to these executives, eight gained at least 173% on the first day of trading.
On a different note, one of the bits of information that has managed to slip under the radar screen is the fact that Senator Jon Corzine (D) from New Jersey was the chief executive presiding over much of the malfeasance.
The Washington Times reported on this story. “Senator Jon Corzine, whose Wall Street expertise plays a key role in Democrat strategy on corporate responsibility, led an investment banking firm that’s being accused of inflating stock prices in the nineties and contributing to the market crash. Mr. Corzine left as chairman in May 1999, has been a target of class-action lawsuits and accusations by a former broker who complained to the SEC that the firm engaged in a scheme to force unwitting investors to pay artificially high prices for certain stocks.”
I get a kick out of this because Jon Corzine was one of the loudest politicians in criticizing the President in regards to corporate wrongdoing. This guy quite frankly is about as two-faced as Goldman’s research. Corzine managed to take a firm that was one of the most respected in the world and turned it into a peddler of dot com stocks. Don’t worry he made a fortune doing it. The ironic thing is that before him the head of Goldman was former Treasury Secretary Robert Rubin. The same Robert Rubin that now works at Citigroup, and the same Robert Rubin that called upon the Bush administration to bail out Enron.
Coincidence? I don’t think so.