This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The 5 Dumbest Things on Wall Street This Week: March 9

Stocks in this article: OSTK C GS P

3. Goldman Gets Sacked

And now for this week's episode of As the Goldman Pillages.

On Monday, El Paso (EP) pushed back a shareholder meeting to vote on the pipeline company's proposed $21 billion acquisition by Kinder Morgan (KMI) in order to give investors more time to chew on a judge's critical ruling of the deal's dirty details.

El Paso said the meeting would be held Friday, instead of Tuesday, and added that shareholders can still change their votes before the gathering. As of Monday, 70% of the outstanding shares have been voted with almost 99% of those shares favoring of the deal.

So what did Delaware Chancery Court Judge Leo Strine say that was distressing enough to delay what most people thought was already a done deal?

Well, he said a heck of a lot about our good buddies at Goldman Sachs (GS), and not much of it nice.

You see, Goldie was on every conceivable side of this deal, sucking every available cent out of it, from a $20 million fee for advising on the transaction to the pop it's getting from its own $4 billion stake in Kinder Morgan and everything in between.

And all that money-sucking would be fine -- egregious, but still fine -- if investors had only known about it. Unfortunately, as Strine points out, Goldman and El Paso CEO Douglas Foshee were far less than forthcoming about what was going on behind the scenes.

As a result, Strine did not block the transaction, but still slammed both the investment bank and Foshee for "incomplete and inadequate" handling of the deal's many conflicts of interest.

One particularly cringe-worthy example of Goldman's conniving cited by Strine was the investment bank's push to have Morgan Stanley (MS) act as a second adviser to the deal in order to prove Goldman's impartiality.

The rub was that Morgan would only get paid if El Paso followed Goldman's bidding and sold out to Kinder Morgan. As a result, the so-called "conflict-cleansing bank" willfully followed Goldman's commands and pushed for the sale.

Oh man, that's a clever maneuver. It's also brazen to the point of stupidity considering Goldman just ponied up $550 million for its conflict-of-interest sins just last year.

Then again, you know the old adage: A vampire squid can't change its stripes.

3 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs