Overturning centuries of English Common Law, false representation is now legal in the United States.
Goldman Sachs Group Inc. (GS) won dismissal of a suit over $450 million in residential mortgage-backed securities, with a New York judge saying that the firms that bought the bonds should have done more research beforehand.
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.
In other words, it’s perfectly legal to present someone with a fraudulent document claiming to be selling them a pig in the poke, because if they don’t actually look in the sack to see that there is a dead rat, and not a live pig in there, it’s their own fault. This is another sign of the continued collapse of the rule of law in the USA.
Congratulations, Justice Ramos. You may have just destroyed the securitization market. Who in their right minds will ever purchase a loan security again? If you were going to review each and every loan and ascertain the risks involved, you would already be a mortgage bank.
Fortunately for Goldman Sachs, there should be enough con artists out there for the apex con artist to continue preying upon. But what sane and honest individual would ever choose to do business with them in light of their behavior here? And can you imagine if this standard were applied across the board? No one would ever dare to buy something in a box or order anything off the Internet ever again.