Goldman Sachs Under Pressure to Return $2.9 Billion Windfall to Taxpayers
Critics of the financial chop shop, of which there are many, would like to see Goldman Sachs return billions in taxpayer dollars paid out to cover a $20 million bet. The huge payout was passed through AIG, orchestrated by then-Chairman Timothy Geithner’s New York Fed, and publicized by the Financial Crisis Inquiry Commission.
It’s now clear that the Federal Reserve Bank of New York, which quarterbacked the hurried, $182 billion bailout of AIG to avoid a meltdown of global financial markets, did little to guard against windfalls for major banks and investment banks.
The financial crisis panel’s final report late last month found that Goldman’s $2.9 billion payout came on “proprietary” trades—investments in which the firm used its own money rather than the more typical deals completed on behalf of clients.