Goldman Sachs: Selling What They Tell Clients To Buy


This should come as no surprise to those who have even remotely been paying attention.  I mean, unless you’ve been living under a rock for the past 3 years, it’d be hard to miss the massive fraud perpetrated by Goldman Sachs on a regular basis.  Who could forget such classics as, Goldman pressing for high ratings on its mortgage-backed securities (CDOs), then selling them off to clients (‘they’re triple-A, you know), while unbeknownst to the sucke….errr….client, took short positions against those very same CDOs.   Then, there’s everyone’s favorite, Hank Paulson denying (to Congress, no less) that he had any knowledge this was happening at Goldman Sachs…..when he was CEO of the firm at the time.  

Despite all this illicit behavior, the Vampire Squid still lives…..and it apparently continues its murderous rampage on clients’ portfolios.  According to The Street:

Goldman helped to catalyze the recent commodity sell-off as its researchers expected little upside when the economy hit a soft patch. Crude oil tumbled beneath $100 on that report. Then, two days ago, with few fundamental changes in the demand outlook, Goldman reversed its stance, advising clients to buy.

This flip-flopping from Wall Street’s most closely followed researcher is being perceived by some as client-fleecing since the bank is able to trade in proprietary accounts before it releases research and the markets react, as they often do to Goldman’s calls.

Heh…but it gets better…..

News broke yesterday, or rather, a blogger pulled data yesterday to show that Goldman dumped 1,260,802 shares of Apple(AAPL_) during the first quarter, even as its research division rated the stock “buy” and maintained its lofty $470 target. Little due diligence is done in the journalism community on the interplay between asset-management and research units.

To check up on the bank’s activities, we tracked its 58 Conviction Buy List stocks, which are the equities that the bank claims that it is most optimistic about to clients, to see if it sold any during the quarter. The results are intriguing. Of the 58 so-called Conviction Buy stocks that Goldman recommended to clients during the first quarter, it sold 31, or more than half, according to its 13-F filing. [We did not include Goldman mutual funds in these calculations].

Of the 31 Conviction Buys that Goldman sold, it sold more than 1 million shares of 12 of those stocks, begging the question: How does Goldman define “conviction”? To most investors, it means putting your money where your mouth is.

On the following page is a look at 12 Conviction Buys that Goldman sold in bulk.

Find out if you’ve been fleeced by going to The Street.

I guess one would have to ask the obvious at this point:  Exactly who still uses these guys for investing?  I mean, really?  How is it they have any clients left at this point?  If you’re thinking, ‘Oh, but I’m different, they only do that to the other guy,’ you really should have your head examined.