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Tuesday, April 20, 2010

With GOP In Its Pocket, Financial Industry Tries To Buy Off UK Conservatives

Last week, the Securities and Exchange Commission charged that Goldman Sachs defrauded investors by failing to disclose conflicts of interest in subprime mortgage investments it sold as the housing market collapsed in 2007. Fabrice Tourre, a Goldman Vice President, is accused of encouraging investments into subprime mortgage securities he knew would fail, while working with a hedge fund to bet against its success. Referring to himself as the “the fabulous Fab,” Tourre boasted in e-mails about his scheme to defraud investors.
Reacting to the SEC’s probe into Goldman, UK Prime Minister Gordon Brown over the weekend called for his own investigation of the firm. “This is probably one of the worst cases that we have seen,” Brown said. The Royal Bank of Scotland, a bank buoyed by a UK taxpayer funded bailout during the financial crisis, was one of the biggest victims of the alleged fraud, losing $841 million dollars. Earlier today, Britian’s Financial Services Authority announced that it will in fact start a formal enforcement investigation into the London unit of Goldman Sachs — where Tourre is currently employed.
The financial industry is fighting back. On Monday, the UK division of legal and lobbying giant DLA Piper released a poll of business leaders showing that an overwhelming majority (60%) want a Tory leader to take over when elections take place on May 6. 36% of respondents specifically expressed hope for the conservative leader David Cameron to become the next Prime Minister. The poll, which is being promoted in the British press, is accompanied by a message from DLA Piper UK’s London Managing Partner Catherine Usher calling for more free market reforms and an end to the Labour “regime”:


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