Analogies in SEC v. Goldman Case
Goldman Sachs told customers the terms of a bet would be set by an independent agent but the SEC alleges a competing customer actually played a significant role setting the terms, which may have been more favorable to it. Consensus emerges that the legal issue is whether it is important to the original customers that terms were set by an independent agent or the competing customer, given that they could inspect the terms for themselves.
It can be useful but difficult to find suitable analogies to help think about this. Yesterday on this blog Deric Ortiz asked whether this is akin to any buyer and seller of securities who simply have different views of the bet, whoever set its terms, which are available for all to see; today in The New York Times Binyamin Appelbaum sees a rough equivalence to alleging that an antiques dealer “lied about the provenance, but not the quality, of an old table.”
I’m not sure either of those analogies work. I’ve come up with other candidates posted below, most of which also seem off for various reasons. I’d like to invite interested creative readers to take a few minutes to contribute additional nominees.
1. A casino operator tells gamblers the dice at the craps table were selected by the state gaming commission (but they are actually selected by a competing gambler, and may or may not be loaded)
2. A real estate developer tells buyers of a new co-op that the allocation of shares was determined by an independent licensed surveyor (but they were actually allocated by one of the other buyers)
3. A university tells applicants that admission from its wait list is determined by random lottery (when in fact they are chosen by another applicant)
4. A Dean tells professors that classroom and time assignments were made by the Academic Dean using an algorithm (when in fact they were chosen by another professor)
5. A rare coin dealer tells buyers that coins are appraised by an independent appraiser (but they were actually appraised by a competing collector)
6. An art auctioneer tells bidders that the authenticity of paintings is verified by independent art historians (but that is actually done by a rival bidder)
7. A lottery commission tells ticket buyers that winners are chosen by lot supervised by an independent auditor (but winners are actually chosen by another ticket buyer)
8. The home football team says the opening coin toss is flipped by an impartial referee (but the flip is actually made by a home team booster, using a coin that may or may not be two-headed)