Defending Goldman Sachs: When the Lawyer Fits the Crime

By
A A A

(List compiled by Becca Lipman. Data sourced from Finviz.)

In an eyebrow raising move, Goldman Sachs' CEO Lloyd Blankfein hired high-profile defense attorney Reid Weingarten. This move comes in response to an investigation launched late April on the bank's role in the 2008 financial crisis.

Goldman has been accused of favoring clients, acting against the interest of other clients, knowingly selling risky subprime loans, misleading Congress during testimony in 2010, and fraud.

The bank has also been a target in recent allegations made by Rolling Stone's expose on big banks in cahoots with the SEC. Weingarten has been hired to represent the bank in inquiries from the U.S Justice Department.

Reuters reports: "The news spooked already jittery investors. Goldman shares fell sharply in the final minutes of regular trading after Reuters reporting the hiring, finishing down 4.7 percent at $106.51, their lowest level since March 2009."

Wondering what the big deal is? For some, the name "Reid Weingarten" may sound familiar. After all, his past clients include "Anthony Cuti, the former CEO of the Duane Reade chain of drugstores, who was convicted of accounting fraud last year... former WorldCom Inc chief Bernard Ebbers, who was later convicted, and former Enron accounting officer Richard Causey, who pleaded guilty in exchange for a 5 to 7-year prison term." (via Reuters)

"I'm used to these monstrously difficult cases where everybody hates my clients," Weingarten told AmericanLawyer.com

While hiring Reid Weingarten isn't a sign of guilt, it is a sign that Goldman is taking the allegations very seriously and know they may have a fight ahead of them.

Goldman is not the only bank subject to investigation from the Justice Department, the New York Attorney General and the Securities and Exchange Commission. To help you understand the names involved, we list below the banking firms addressed in Matt Taibbli's exposé in Rolling Stone along with some key financials.

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

1. JPMorgan Chase & Co. (JPM): Money Center Banks Industry. Market cap of $135.61B. The stock is currently stuck in a downtrend, trading -7.1% below its SMA20, -11.47% below its SMA50, and -17.64% below its SMA200. The stock has performed poorly over the last month, losing 16.57%.

2. Wells Fargo & Company (WFC): Money Center Banks Industry. Market cap of $126.40B. Might be undervalued at current levels, with a PEG ratio at 0.72, and P/FCF ratio at 4.53. The stock is currently stuck in a downtrend, trading -6.09% below its SMA20, -10.57% below its SMA50, and -18.04% below its SMA200. The stock has performed poorly over the last month, losing 16.93%.

3. Citigroup, Inc. (C): Money Center Banks Industry. Market cap of $79.72B. This is a risky stock that is significantly more volatile than the overall market (beta = 2.51). The stock is currently stuck in a downtrend, trading -16.68% below its SMA20, -26.14% below its SMA50, and -36.67% below its SMA200. It's been a rough couple of days for the stock, losing 8.75% over the last week.

4. Bank of America Corporation (BAC): Regional Banks Industry. Market cap of $63.95B. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock is currently stuck in a downtrend, trading -22.87% below its SMA20, -34.23% below its SMA50, and -48.17% below its SMA200. It's been a rough couple of days for the stock, losing 14.86% over the last week.

5. The Goldman Sachs Group, Inc. (GS): Diversified Investments Industry. Market cap of $54.05B. The stock is currently stuck in a downtrend, trading -13.19% below its SMA20, -17.34% below its SMA50, and -29.28% below its SMA200. It's been a rough couple of days for the stock, losing 8.57% over the last week.

6. American International Group, Inc. (AIG): Property & Casualty Insurance Industry. Market cap of $43.50B. 0The stock is currently stuck in a downtrend, trading -9.72% below its SMA20, -16.42% below its SMA50, and -34.16% below its SMA200. It's been a rough couple of days for the stock, losing 6.49% over the last week.

7. Deutsche Bank AG (DB): Foreign Money Center Banks Industry. Market cap of $37.56B. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock is currently stuck in a downtrend, trading -15.86% below its SMA20, -25.21% below its SMA50, and -30.% below its SMA200. It's been a rough couple of days for the stock, losing 9.66% over the last week.

8. Morgan Stanley (MS): Investment Brokerage Industry. Market cap of $30.45B. The stock is currently stuck in a downtrend, trading -17.42% below its SMA20, -25.17% below its SMA50, and -37.88% below its SMA200. It's been a rough couple of days for the stock, losing 7.67% over the last week.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: AIG , BAC , C , DB , GS , JPM , MS , WFC

Kapitall

Kapitall

More from Kapitall:

Related Videos

Cheap Ways to Sleep Better
Cheap Ways to Sleep Better          

Stocks

Referenced

57%
72%
73%
56%
60%

Most Active by Volume

105,679,298
  • $16.13 ▼ 0.19%
43,130,824
  • $101.32 ▲ 0.74%
24,108,376
  • $59.80 ▲ 7.34%
22,524,427
  • $26.15 ▼ 1.06%
22,194,114
  • $24.65 ▼ 0.96%
21,835,360
  • $99.05 ▲ 0.15%
20,872,575
  • $34.94 ▼ 0.60%
20,561,803
    $74.57 unch
As of 8/22/2014, 04:02 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com