Liar's Poker Goldman Sachs
Liar’s Poker is the culmination of those heady, frenzied years—a behind-the-scenes look at a unique and turbulent time in American business. From the frat-boy camaraderie of the forty-first-floor trading room to the killer instinct that made ambitious young men gamble everything on a high-stakes game of bluffing and deception, here is. Goldman is negotiating a fine of about USD 2 billion from the Department of Justice and trying to assign blame to the actions of its Singapore office. Glaring compliance failures were made evident in 2018 when Goldman partner Tim Leissner pleaded guilty to taking more than USD 200 million and paying bribes to government bureaucrats. Liar's Poker is that one book everyone possibly has heard of as one of the most funniest books on finance. It is true that I did pick it up for a small introduction to finance. What I read however was an extraordinary account of the corporate world from how they hire to how they make sudden decisions to fire the same employees. Jul 15, 2020 The son of revered block-trading boss Rob Mnuchin, he interned for Lewie Ranieri in the “Liar’s Poker” heyday, then made partner at Goldman in nine years, where he was to some extent a.
Ever bought a fake picture? The more you pay for it the less inclined you are to doubt its authenticity. That is how underlying motivation for the most sophisticated scams and frauds, from Madoff to 1MDB. While Goldman Sachs has been the subject of intense investigation and reporting, it may actually be the victim at the centre of an elaborate gambit. The case holds valuable high-level lessons for investment banking compliance, due diligence and KYC.
1MDB’s four-year fallout continues at Goldman Sachs as Andrea Vella recently became the third executive to be named and implicated. More than USD 4 billion was allegedly stolen from the Malaysian state development fund. Goldman is negotiating a fine of about USD 2 billion from the Department of Justice and trying to assign blame to the actions of its Singapore office. Glaring compliance failures were made evident in 2018 when Goldman partner Tim Leissner pleaded guilty to taking more than USD 200 million and paying bribes to government bureaucrats.
In a post-GFC age of compliance, the cold hard lesson of 1MDB for financial institutions is that compliance – especially at the most senior levels – is only as effective as executives’ collective ability to self-police hazardous deals involving politically exposed individuals. And therein lies the opportunity to be exploited and deceived by even the most credible counterparties.
Deception combined with greed corrodes judgement, no matter how well it is quantitatively supported. It can lead to a series of poor judgements, confirmation bias and even criminal conduct, in the way that high-risk clients are onboarded and complex structured transactions are executed. Goldman Sachs might have actually been set up as the “mark” from the very beginning.
The first step in a fraud is to understand what the “mark” really wants. Making them feel like they are doing you the favour is the key to ingratiating yourself. Besides lucrative fees and a large deal size, the public development purpose and top government leaders’ support of 1MDB helped it pass the initial test.
However, 1MDB appears to have been conjured up with the intention of defrauding investors without much effort to even hide behind economic development projects to cover the misdirection of funds. The ongoing trial of former Malaysian Prime Minister Najib Razak and investigation of the Malaysian financier Jho Low and his associates have so far yielded no clues for recovering the stolen funds.
It is especially disturbing to view the case as a massive fraud which from the beginning depended on enlisting a global investment bank to front the fund raising and transfer of monies.
Source: Liar’s Poker – The 1MDB Version