http://market-ticker.org/akcs-www?post=229099This can't be good for securities markets. Or just about any markets.
Buyer: "Hey, when I got home and opened the package that prominently advertizes a PC on the label, I found a brick with an abacus tied to it, not a personal computer. I would like a refund."
Seller: "Too bad, no refund. You could have opened the package and checked to ensure we were selling you a PC instead of a brick with an abacus tied to it. Suck it up, buttercup."
State Supreme Court Justice Charles Ramos dismissed the claims against Goldman Sachs today, saying the investors only reviewed data presented in offering documents for the securities and never asked to review files for the underlying loans.
“The true nature of the risk being assumed could, admittedly, have been ascertained from reviewing these loan files and plaintiffs never asked for them,” Ramos wrote.
Either I can rely on the label (in this case the offering prospectus) or I can't. The fact of the matter is that all of these securities came with offering circulars and prospectuses that made representations as to the quality of the loans in them. Those representations were false and yet what this dismissal says is that as a matter of law if I don't require you to prove the representations you make then the fault is mine -- not yours -- even if what you represent is not true and (as was the case here) you're in possession of the data to know it's false.
Mash the first linky. Not too long, but gets the point across.
