Goldman Sachs can't shake mark of the beast


Goldman Sachs Caves In to Critical Blogger

By James Quinn
The Telegraph, London
Wednesday, July 15, 2009

Goldman Sachs has caved in and allowed a critical blogger to continue airing his negative views about the investment bank on a controversially-named website.

In a surprising conclusion in what has been a real life David vs Goliath battle, Florida-based estate agent and investment adviser, Mike Morgan, will be allowed to keep his site up and running.

The bank, which on Tuesday reported a 65 percent rise in second-quarter profits to $3.4 billion (L2.07 billion), has backed down after earlier threatening to shut down the site, which is designed to discuss what Mr Morgan considers to be the the bank’s failings.

"Mike Morgan never backs down," wrote Mr Morgan on the site, the name of which he has previously joked relates to the S&P500's most recent bear-market low -- 666 points -- rather than the number of the beast.

"I kicked their butt," he told The Daily Telegraph.

In an agreement reached in the US District Court in Florida, Goldman agreed to "refrain from any action that interferes with Morgan's use" of the site as long as he continues to display a prominent disclaimer which states that the site has nothing to do with the bank.

Mr Morgan started the website after becoming incensed over the fall-out from Goldman Sachs' involvement with American International Group, when the bailed-out insurer's $12.9 billion payment to the bank to cover counterparty exposures went barely unnoticed while the American public became incensed over $165 million bonus payments to AIG staff.

Although the site's original focus was to keep readers up-to-date on news surrounding the bank, one post, entitled "Does Goldman Sachs run the world?," questions alleged links between former employees and various world governments.

Goldman first threatened Morgan in April, hiring Wall Street law firm Chadbourne & Parke to send a cease-and-desist letter, warning of legal action if the site was not taken down.

At the time, the bank stressed that it was simply protecting its trademark name. However, Morgan quickly attempted to turn the legal tables, countersuing the bank under trademark law.

It is not the first time Morgan, who admitted to The Daily Telegraph in April that he holds a short position in Goldman's shares, has been involved in such a battle with a large corporation.

A few years ago, he ran an Internet campaign against major American housebuilder Lennar over the quality of its construction, a campaign that ended in an out-of-court settlement following a heated legal spat.

But this time around Mr Morgan's victory is somewhat pyrrhic, however, given he had a heart attack during the spat and underwent quadruple bypass surgery soon after.

As a result, he is stepping back from some of his business operations, and is looking for a willing volunteer to take over the day-to-day running of the site.

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