In a party line 3-2 vote SEC commissioners voted to sue Goldman Sachs. The SEC charges that Goldman fraudulently represented to investors that the mortgages underlying one of its residential mortgage-backed securities were being selected by an independent third-party. The mortgages, however, were selected by Paulson & Co., a hedge fund that also took a $15 million credit default swap position betting against the same residential mortgage-backed security.

The Epicurean Dealmaker puts the whole fuss wittily into perspective.

I have been reliably informed that something scandalous has recently been unearthed which involves a recurring target of Your Formerly Diligent Blogosopher’s ruminations. I even believe the word “fraud” has been bandied about liberally.

Given that a) I have been occupied elsewhere, and b) I really couldn’t give a flying fuck in a rolling donut whether the Great Vampire Squid of West Street (new digs, natch) vanishes into the singularity or not, I frankly have not paid much attention to the scandal beyond a cursory perusal of the headlines and a couple of blog posts. Honestly, life is just too short.

However, in the spirit of duty which compels Your Humble Servant to satisfy every bloggy whim my Peremptory Audience demands of me (and also because Natasha has temporarily left the hotel room to get more caviar and ice cubes), I will make the following brief observations:

The parties which Goldman supposedly defrauded were large and supposedly sophisticated financial institutions. The managers of these institutions were or should have been paid quite large sums of money to, among other things, protect their stakeholders from fraud, unethical sales practices, and general office supply stealing. I have no sympathy whatsoever for the knuckleheads at ACA or IKB. And, frankly, neither should you.

Whether the alleged fraud rises to the level of an actionable civil claim or simply represents unethical behavior is a question for a court of law. I am not qualified to judge, but the criteria which ultimately determine the nature of Goldman’s alleged offense will be legalistic ones, akin to judging exactly how many mortgage CDO investors’ brains can be fitted onto the head of a pin. While the answer may be definitive, it will not be particularly revealing to the vast majority of us who live outside the cloistered halls of Americus Litigalis.

I must agree with Felix Salmon and others, who claim that the real damage to Goldman Sachs has already been done, with its formerly venerated name being dragged publicly through the mud with an accusation of fraud. While this may have little effect on the majority of Goldman’s business on the sales and trading side of the house—where counterparties are generally too smart to raise a stink about the 800 pound gorilla of the global financial markets (and often too unprincipled themselves to care) — it should and will have an effect on Goldman’s extensive investment banking business with governments, corporations, and other entities.

The Squid has been living for years off the simple fact that, like the fabled IBM of yore, no-one ever got fired (or sued) for picking Goldman Sachs. That calculus has been changed, and I and every one of my red-blooded peers in the industry who is not currently drawing a paycheck signed by David Viniar are making damn sure that CEOs, CFOs, government officials, and Boards of Directors know it. For those of you who were wondering, this is the real reason why Goldman’s market capitalization has taken the vapors to the tune of more than ten billion dollars in response to an action likely to cost it no more than a tiny fraction of that amount: its reputation premium is quietly and rapidly evaporating. There is no shortage of competent investment banks and adequate investment bankers available to conduct the financing and M&A business of the global corporate and government economy. No longer can Goldman rest assured that it will win mandates simply because it is Goldman Sachs.

Hat tip to Walter Olson.

After dragging through the courts for nine years, the American Society for the Prevention of Cruelty to Animals (ASPCA) lawsuit against Feld Entertainment, owner of the Ringling Brothers and Barnum & Bailey circus, alleging that training and exhibiting circus elephants constituted cruelty to animals and represented a violation of the Endangered Species Act was dismissed by a federal judge after a six week trial, when the judge concluded that the key witness and joint plaintiff, a former Ringling Brothers employee and elephant handler named Tom Rider, had been paid by animal rights groups for his participation.

The Telegraph reports:

[District] Judge Sullivan.. dismissed the plaintiffs’ case after it emerged that Rider had been paid tens of thousands of dollars by the animal rights groups involved.

“The court finds that Mr Rider is essentially a paid plaintiff… who is not credible, and therefore affords no weight to his testimony,” he wrote in his verdict.

“Mr Rider’s self-serving testimony at trial about his personal and emotional attachment to these elephants also is not credible because he did not begin to make complaints about how Feld Entertainment treated its elephants until after he began accepting money from animal activists.”

Rider had compared his affection for the Ringling Bros elephants, which he called his “girls,” to his love for his own family, and claimed that he had left both Ringling and another circus due to the distress he suffered while working there.

Evidence produced by the defence, however, demonstrated that Rider had never communicated dissatisfaction with the animals’ treatment to any employer. He was unable to recall the names of all his former charges and in one photograph was even shown using a bullhook.

Feld Entertainment’s (FEI) attorney in the trial, Michelle Pardo of Fulbright & Jaworski, said that “the case uncovered a very curious and disturbing side about the agenda of some of these animal rights groups, and what they do with donors’ money”.

Michael Simkins is appalled at the point to which the contemporary nanny state has reduced Britain, a condition in which restaurants must ask patrons to sign a waiver of liability for a pudding.

The owners of the High Timbers (sic) restaurant, located in the heart of London, are insisting that customers sampling their festive menu sign a legal waiver before sitting down to eat.

The restaurant is currently offering plum pudding as part of its seasonal fare, which, as ancient custom (and the recipe) dictates, is prepared with the odd silver coin or lucky charm thrown into the mix.

But so wary have the management become of expensive lawsuits brought by any patron chipping a veneered tooth or choking on silver horseshoes that each portion arrives with both a jug of brandy sauce and a legal disclaimer.

Jeremy Clarkson, of the British television program Top Gear, visited the United States back in 2006. He didn’t like a lot of the same things about this country that I don’t like.

Step out of the loop, do something unusual and you’ll encounter a wall of low-paid, low-intellect workers whose sole job is to prevent their bosses from being sued. As a result, you never hear anyone say: “Oh I’m sure it’ll be all right.” ...

You know the Stig. The all-white racing driver we use on Top Gear. Well, we were filming him walking through the Mojave desert when lo and behold a lorry full of soldiers rocked up and arrested him. He was unusual. He wasn’t fat. He must therefore be a Muslim.

It gets worse. I needed money to play a little blackjack in Vegas but because I was unable to provide the cashier with an American zip code he was unable to help. It’s the same story at the petrol pumps. Americans can punch their address into the key pad and replenish their tank. Europeans have to prove they’re not terrorists before being allowed to start pumping.

I seem to recall a television advertisement in which George W Bush himself urged us all to go over there for our holidays. But what’s the point when you can’t buy anything? Or do anything. Or walk across the desert in a white suit without being arrested.

The main problem I suspect is a complete lack of knowledge about the world. I asked people in the streets of Vegas to name two European countries. The very first woman I spoke to said: “Oh yes. What’s that one with kangaroos?”

Then you’ve got New Orleans, which, nearly a year after Katrina, is still utterly smashed and ruined. Now I’m sorry but insects can build shelter on their own. Birds can build nests without a state handout. So why are the people of Louisiana sitting around waiting for someone else to do the repairs? ...

Among the things I don’t like is the way everyone over 15 stone now moves about in a wheelchair. As a result, it takes half an hour to get through even the widest door. And I really don’t like the way that every small town looks exactly the same as every other small town. Palmdale in California and Biloxi in Mississippi are nigh on identical. They have the same horrible restaurants. The same mall. The same interstate drone. Live in either for more than a week and you’d be stabbing your own eyes with knitting needles.

But it’s the idiocracy that really gets me down. The constant coaxing you have to do to get anything done. “No” is the default setting whether you want to change lanes on a motorway or get a drink on a Sunday. It’s like trying to negotiate with a donkey. Once, I urged a cop in Pensacola, Florida, to use his common sense and let me load a van in the no loading zone, since the airport was shut and it would make no difference. “Sir,” he said, “you don’t need common sense when you’ve got laws.”

Litigation explosion’s latest victim

This news item from the LA Times makes it clear that adoption of sharia law by western jurisdictions will only produce an increase in litigation in new and interesting ways.

A family in Saudi Arabia has filed suit in a religious court against an unnamed genie, or jinn, who sounds most unpleasant: It steals cellphones, whispers threats and occasionally flings stones.

“We began to hear strange sounds,” a family member who requested anonymity told the Saudi daily Al Watan. “At first we did not take it seriously, but then stranger things started to happen, and the children got particularly scared when the genie started throwing stones.”

The genie—or genies—had demands: “A woman spoke to me first, and then a man. They said we should get out of the house,” said the family member, adding that his clan fled their home near the city of Medina. ...

Sheikh Amr Al Salmi, head of the local Sharia court, said he will investigate the family’s claims that it has been harassed for two years: “We have to look into this case and verify its truthfulness despite the difficulty of
its consideration,” he told the Saudi daily. “What is interesting is that the complaint has come from every member of the family, and not just one.”

The Telegraph reports that the modern litigation society has arrived in the British rural village, and traditions like cricket on the green may soon become its casualty.

A county court is to rule whether a homeowner can stop his local village cricket team playing because of the threat of players knocking a six on to his roof or into his garden.

In a long running dispute that has more the hallmarks of a bitter divorce than a neighbourly dispute, a judge will be asked to hand down a legal ruling that will have implications for amateur cricketers up and down the country.

It centres on Shamley Green, near Guilford in Surrey, where cricket has been played on its village green for 169 years, despite roads running through the playing area and the backs of houses dotting the boundary.

But four years ago, when Mike Burgess moved into a bungalow on the edge of the boundary and just 25 yards from the crease, all that changed.

Aware that a crisp, square leg pull could run under his gate or through his hedge; or a slog could arrow straight onto his roof, he issued a set of demands that would protect his bungalow.

After a flurry of arguments, legal letters and even a session of independent mediation, Mr Burgess is now asking the court to issue an injunction against the club, preventing it from playing on the green until his demands are met.

They include calling for the club to put up 25ft high nets around his property to protect it from any stray balls, and for players to be declared out if they hit it so hard it clears the nets and hits his property. He also wants a health and safety risk assessment to protect other homeowners and the general public while a match is on.

Walter Olson forwarded this news item from Drug and Device Law, noting that, even in California, some spoilsport judges won’t let you sue if a product actually works and does not harm you.

[T]he defendant was basically shut down by the FDA over Good Manufacturing Practices issues at its plant. The defendant recalled over 100 drugs (it was a generic manufacturer) at the wholesale, but not retail level. The plaintiff took one of these drugs, was not hurt by it, but sued over all 100+ drugs. ...

The court threw it out on the eminently sensible ground that a plaintiff who took a drug that was effective, and wasn’t hurt by it, hasn’t been injured just by the drug being “adulterated” under the FDCA because there were GMP violations at the plant where it was made. The court literally concluded that “life’s too short” to allow this kind of 100% opportunistic litigation.

Wouldn’t a poison dart from a blow gun be more to the point? Shouldn’t they be asking to be allowed to shrink Jared Diamond’s head?

New York Post:

Two New Guinea tribesmen described by The New Yorker magazine as vengeful, bloodthirsty killers are settling their score with the venerable publication the nonviolent, American way: with a lawsuit. ...

In an April 21, 2008, article on blood feuds by Pulitzer Prize-winning scientist Jared Diamond… a hired thug shot Isum Mandingo… in the back with an arrow, leaving him paralyzed and in a wheelchair. ...

When media watchdog group stinkyjournalism.org sent a team of fact-checkers to New Guinea to check the article’s veracity, they found Mandingo, who disputed reports of his paralysis by walking on his own two feet.

“No matter what The New Yorker says and what Diamond says, the fact is that he is not paralyzed and is not confined to a wheelchair,” said Rhonda Shearer, the site’s founder.

“It seems The New Yorker was so naive as to think that this article would not reach these supposedly primitive people in New Guinea.” ...

Mandingo told the researchers he had no involvement in any blood feuds. In fact, he’s a peace officer in his village. Neither Diamond nor the magazine reached out to him for confirmation, he said.

The entire article is “untrue,” Mandingo told the group.

Also from Freddie:

[I]f our scheming entrenched WASP power brokers can’t steal the skulls of centuries-dead American Indian revolutionaries and display them in their inner sanctums… what’s the point?

Earlier posts 1, 2

Some building at Yale

Phillip K. Howard, in an excellent essay in the Wall Street Journal, describes the impact of limitless litigation and regulation on American life and the American character.

Here we stand, facing the worst economy since the Great Depression, and Americans no longer feel free to do anything about it. We have lost the idea, at every level of social life, that people can grab hold of a problem and fix it. Defensiveness has swept across the country like a cold wave. We have become a culture of rule followers, trained to frame every solution in terms of existing law or possible legal risk. The person of responsibility is replaced by the person of caution. When in doubt, don’t.

All this law, we’re told, is just the price of making sure society is in working order. But society is not working. Disorder disrupts learning all day long in many public schools—the result in part, studies by NYU Professor Richard Arum found, of the rise of student rights. Health care is like a nervous breakdown in slow motion. Costs are out of control, yet the incentive for doctors is to order whatever tests the insurance will pay for. Taking risks is no longer the badge of courage, but reason enough to get sued. There’s an epidemic of child obesity, but kids aren’t allowed to take the normal risks of childhood. Broward County, Fla., has even banned running at recess.

The flaw, and the cure, lie in our conception of freedom. We think of freedom as political freedom. We’re certainly free to live and work where we want, and to pull the lever in the ballot box. But freedom should also include the power of personal conviction and the authority to use your common sense. Analyzing the American character, Alexis de Tocqueville, considered “freedom less necessary in great things than in little ones. . . . Subjection in minor affairs does not drive men to resistance, but it crosses them at every turn, till they are led to sacrifice their own will. Thus their spirit is gradually broken and their character enervated.”

Read the whole thing.

Daily Mail

The Telegraph reports another inversion of the rule of law in contemporary Britain.

A gardener who fenced off his allotment patch with a single strand of barbed wire to protect it from thieves has been ordered to take it down in case intruders hurt themselves.

Bill Malcolm, 61, was told to “remove it on health and safety grounds” by the local council, which owns the allotments.

He erected the deterrent after thieves struck three times in four months, stealing more than £300 worth of spades, forks, hoes and wrecking his potato patch in the process.

But officials instructed Mr Malcolm to remove the waist-high wire from his plot at Round Hill Allotments in Marlbrook, Worcs.

He said: “It’s an absolutely ridiculous situation, all I wanted was to protect my property but the wire had to go in case a thief scratched himself.

“The council said they were unhappy about the precautions I had made but my response was to tell them that only someone climbing over on to my allotment could possibly hurt themselves.

“They shouldn’t be trespassing in the first place but the council apologised and said they didn’t want to be sued by a wounded thief.

Mayor Bloomberg’s attorneys argue in their brief, and the Second Amendment may wind up excluded, being traded for a similar gag order on references to the National Rifle Association, the New York Sun reports.

Lawyers for Mayor Bloomberg are asking a judge to ban any reference to the Second Amendment during the upcoming trial of a gun shop owner who was sued by the city. While trials are often tightly choreographed, with lawyers routinely instructed to not tell certain facts to a jury, a gag order on a section of the Constitution would be an oddity.

“Apparently Mayor Bloomberg has a problem with both the First and the Second amendments,” Lawrence Keane, the general counsel of a firearms industry association, the National Shooting Sports Foundation, said.

The trial, set to begin May 27, involves a Georgia gun shop, Adventure Outdoors, which the city alleges is responsible for a disproportionate number of the firearms recovered from criminals in New York City. The gun store’s owner, Jay Wallace, says his store abides by Georgia and federal regulations and takes steps to avoid selling firearms to gun traffickers. Mr. Wallace’s store is one of 27 out-of-state gun shops sued by New York City, and the first to go to trial.

City lawyers, in a motion filed Tuesday, asked the judge, Jack Weinstein of U.S. District Court in Brooklyn, to preclude the store’s lawyers from arguing that the suit infringed on any Second Amendment rights belonging to the gun store or its customers. In the motion, the lawyer for the city, Eric Proshansky, is also seeking a ban on “any references” to the amendment.

“Any references by counsel to the Second Amendment or analogous state constitutional provisions are likewise irrelevant,” the brief states. ...

Of the city’s recent motion to preclude mention of the Second Amendment, a lawyer for Adventure Outdoors, John Renzulli, said, “If you can’t discuss the Bill of Rights in a court of law, where should we discuss these issues? Should we reserve it for the tavern?”

Mr. Renzulli said the city’s lawsuit did implicate the Second Amendment: “The politics involved here is whether the city has the power to go into another state and control the lawful sale of firearms.”

Still, Mr. Renzulli said he did not plan to oppose the city’s request regarding references to the Second Amendment. Mr. Renzulli, who has defended suits against the gun industry in Judge Weinstein’s courtroom before, said that in the past the defense has struck a deal with the plaintiffs on the matter: Lawyers for the gun industry won’t mention the Bill of Rights to the jury, if the plaintiffs don’t mention the National Rifle Association.

“We usually say we’re not talking about the Second Amendment and you’re not talking about the NRA as a huge lobbying group that controls the legislature,” Mr. Renzulli said.

He said he expected a similar agreement to be struck in the Adventure Outdoors case.

The Sun article fails to note that care had to have been taken to assure that this suit will be coming up before Judge Jack B. Weinstein, an activist leftist appointed to the bench by Lyndon Johnson, who routinely makes headlines with rulings favoring this sort of politically-motivated litigation.

Adventure Outdoors needs a better attorney. How can anyone be properly represented in a lawsuit involving firearms who thinks there is some kind of stigma attached to the National Rifle Association?

Hat tip to Walter Olson.

Priya Venkatesan, Dartmouth ‘90

Joseph Rago, at the Wall Street Journal, is running a bit late in covering a recent political correctness flap at Dartmouth, but I’m even later since I only learned of this news story from him.

Often it seems as though American higher education exists only to provide gag material for the outside world. The latest spectacle is an Ivy League professor threatening to sue her students because, she claims, their “anti-intellectualism” violated her civil rights.

Priya Venkatesan taught English at Dartmouth College. She maintains that some of her students were so unreceptive of “French narrative theory” that it amounted to a hostile working environment. She is also readying lawsuits against her superiors, who she says papered over the harassment, as well as a confessional exposé, which she promises will “name names.”

The trauma was so intense that in March Ms. Venkatesan quit Dartmouth and decamped for Northwestern. She declined to comment for this piece, pointing instead to the multiple interviews she conducted with the campus press.

Ms. Venkatesan lectured in freshman composition, intended to introduce undergraduates to the rigors of expository argument. “My students were very bully-ish, very aggressive, and very disrespectful,” she told Tyler Brace of the Dartmouth Review. “They’d argue with your ideas.” This caused “subversiveness,” a principle English professors usually favor.

Ms. Venkatesan’s scholarly specialty is “science studies,” which, as she wrote in a journal article last year, “teaches that scientific knowledge has suspect access to truth.” She continues: “Scientific facts do not correspond to a natural reality but conform to a social construct.”

The agenda of Ms. Venkatesan’s seminar, then, was to “problematize” technology and the life sciences. Students told me that most of the “problems” owed to her impenetrable lectures and various eruptions when students indicated skepticism of literary theory. She counters that such skepticism was “intolerant of ideas” and “questioned my knowledge in very inappropriate ways.” Ms. Venkatesan, who is of South Asian descent, also alleges that critics were motivated by racism, though it is unclear why.

After a winter of discontent, the snapping point came while Ms. Venkatesan was lecturing on “ecofeminism,” which holds, in part, that scientific advancements benefit the patriarchy but leave women out. One student took issue, and reasonably so – actually, empirically so. But “these weren’t thoughtful statements,” Ms. Venkatesan protests. “They were irrational.” The class thought otherwise. Following what she calls the student’s “diatribe,” several of his classmates applauded.

Ms. Venkatesan informed her pupils that their behavior was “fascist demagoguery.” Then, after consulting a physician about “intellectual distress,” she cancelled classes for a week. Thus the pending litigation.

The original story, Dartblog 4/26 quotes Ms. Venkatesan’s emails

Email 1:

——- Original Message——-
From: Priya Venkatesan
To: [REDACTED]@Dartmouth.edu ; editor@dartmouth.com
Sent: Friday, April 25, 2008 [time redacted]
Subject: Class Action Suit

Dear Student:

As a courtesy, you are being notified that you are being named in a potential class action suit that is being brought against Dartmouth College, which is being accused of violating federal anti-discrimination laws. Please do not respond to this email because it will be potentially used against you in a court of law.

Priya Venkatesan, PhD

Email 2:

—- Forwarded message from “Priya Venkatesan”—-

From: “Priya Venkatesan”
To: < [REDACTED]Dartmouth.EDU>,
Subject: Re: Class Action Suit
Date: Fri, 25 Apr 2008 [time redacted]

Dear Student:

Please disregard the previous email sent by Priya Venkatesan. This is to officially inform you that you are being accused of violating Title VII pertaining to federal anti-discrimination laws, by the plaintiff, Priya Venkatesan. You are being specifically accused of, but not limited to, harassment. Please do not respond to this email as it will be used against you in a court of law.

Priya Venkatesan, PhD

Email 3:

Date: Sat, 26 Apr 2008 20:56:35 -0400 (EDT)
From: Priya.Venkatesan@Dartmouth.EDU
To: “WRIT.005.17.18-WI08”:;, Priya.Venkatesan@Dartmouth.EDU
Subject: WRIT.005.17.18-WI08: Possible lawsuit

Dear former class members of Science, Technology and Society:

I tried to send an email through my server but got undelivered messages. I regret to inform you that I am pursuing a lawsuit in which I am accusing some of you (whom shall go unmentioned in this email) of violating Title VII of anti-federal [SIC] discrimination laws.
The feeling that I am getting from the outside world is that Dartmouth is considered a bigoted place, so this may not be news and I may be successful in this lawsuit.
I am also writing a book detailing my experiences as your instructor, which will “name names” so to speak. I have all of your evaluations and these will be reproduced in the book.

Have a nice day.

Priya

Priya Venkatesan’s academic goal:

After finishing up my studies in literature, I entered a molecular biology lab at DMS with the intention of seeking parallels between scientific practice and literature. My interests in graduate school were mainly theoretical, as I textually analyzed certain aspects of scientific communication. However, for me, a question remained: Is there room for literary theory within the framework of the laboratory?

Priya Venkatesan left Dartmouth and wound up at Northwestern. She announced that she was withdrawing her law suit the students, and would avenge herself on them via a novel, but she was still planning to sue Dartmouth.

Dartmouth Review interview 4/30.

————————————————————————————-

Dartmouth Independent 5/1 update and bio.

One female student was a nose-blower,” says Priya Venkatesan, who, until just a few weeks ago, was a professor in Dartmouth’s writing department. A 1990 graduate of the College, Venkatesan spent the better part of her twenties earning a Masters in Genetics and a PhD in Literature. But those were different days. Now, Venkatesan finds her thoughts occupied by that student who “incessantly disrupted class with her nose-blowing.” Or the one who interrupted her lecture on bioethics with “a real evil look that made me feel very uncomfortable.” Or the one who loudly declared that Lyotard was “cheesy.”

A casual observer might conclude that Venkatesan is on the edge of a nervous breakdown, frantically trying to confront her demons that sometimes appear to her as students. But Venkatesan has no apparent demons; in fact, she seems like she has had a very normal, undramatic life. Raised halfway between New York City and Albany by traditional Hindu parents, Venkatesan suggests that her heavy inculcation in Indian culture may have played a part in her ardent desire to excel academically (but then again it may not have – such is the nature of the self-described “postmodernist in the laboratory”). ...

Hat tip to Karen L. Myers.

Residents of the Aegean island of Lesbos are suing a gay organization in Greek court over use of the name “Lesbian.”

AP:

One of the plaintiffs said Wednesday that the name of the association, Homosexual and Lesbian Community of Greece, “insults the identity” of the people of Lesbos, who are also known as Lesbians.

“My sister can’t say she is a Lesbian,” said Dimitris Lambrou. “Our geographical designation has been usurped by certain ladies who have no connection whatsoever with Lesbos,” he said.

Yale University is in a tizzy this week as irate members of the Yale Women’s Center are reacting with ferocity to the above photo of a dozen Zeta Psi pledges posing in front of oppressed femininity’s campus refuge provocatively holding a sign reading “WE LOVE YALE SLUTS.”

A thoroughly groveling apology (which additionally accepts responsibility for the tragic incident) from the fraternity chapter’s president has proven inadequate to quell the feminist wrath or to deflect the aroused furies from their expressed intention of suing the fraternity, the University and the individuals in the photograph on grounds of sexual harassment and defamation. And the feminist group has issued a manifesto discussing the emotional and psychological impact of “the violence of hate speech” and expressing a firm intention of seeking judicial revenge.

Yale’s sexists love to say that feminists have no sense of humor. Here’s a good joke: lawyer up.

Angry Womynist Political Action Coordinator