why do even bigshots fall for these scams

  1. 6,716 Posts.
    From "The Age":

    Banker sues Goldman Sachs for misleading conduct

    INVESTMENT banker Greg Bundy is suing stockbroker Goldman Sachs JBWere for misleading and deceptive conduct over an abandoned agreement that he would buy shares at pre-set prices between last September and November this year.

    The suit counters a February demand that Mr Bundy � a former chief executive of Goldman Sachs' rival, Merrill Lynch Australia, and now a director of stockbroking and financial planning company Tolhurst Group � pay Goldman Sachs $5.7 million.

    According to documents filed in the Federal Court, Goldman Sachs says Mr Bundy defaulted on trading agreements it marketed as "Buy Below Market" transactions, or BBMs.

    Mr Bundy claims Goldman Sachs told him before he began buying shares in Zinifex, BHP Billiton and AMP in September that he could "bring a BBM transaction to a premature end at his election". It was in breach of the misleading and deceptive conduct provisions of the Trade Practices Act, he alleges, by "stating what was at best a half-truth".

    He says he would not have embarked on the trading without the assurance.

    Mr Bundy's barrister, Cameron Moore, told the court yesterday that representatives of Goldman Sachs said at a couple of meetings that Mr Bundy was entitled to break the trade.

    Goldman Sachs' solicitor, Mallesons partner Linda Johnson, said her client denied the allegations and would file a cross-claim against Mr Bundy.

    Justice Arthur Emmett asked if the defence was "that the conduct was not misleading or that the conduct did not occur".

    "That the conduct was not misleading," Ms Johnson replied.

    Mr Bundy's statement of claim shows that under the BBM transactions, he would have spent up to $29.8 million on the three stocks between last September and November this year.

    The arrangement involved him buying up to $307,000 worth of Zinifex shares a week, up to $192,500 worth of BHP shares a week and up to $73,000 worth of AMP shares a week. Each agreement, which was to run for a year, specified a purchase price and a higher "knockout" price.

    If the market price rose above the "knockout" price, the transaction would terminate.

    In fact, between December and February, the share prices of Zinifex, BHP Billiton and AMP fell below the specified purchase prices.

    In January, Mr Bundy sold the Zinifex and AMP shares he had bought for a combined loss of $933,000.

    He made no further payments to Goldman Sachs.

    Mr Bundy wants his loss reimbursed and a declaration from the court that the trading agreement is not enforceable.

    This guy sounds about as smart as Kelly Bundy
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