SEC Slaps Goldman Sachs With Fraud Suit
In a move that may signal the beginning of the end of Goldman Sachs' golden era, the Securities and Exchange Commission filed a civil suit Friday against the banking behemoth, accusing the company of selling customers subprime mortgage derivatives (continued)In a move that may signal the beginning of the end of Goldman Sachs' golden era, the Securities and Exchange Commission filed a civil suit Friday against the banking behemoth.
In a move that may signal the beginning of the end of Goldman Sachs’ golden era, the Securities and Exchange Commission filed a civil suit Friday against the banking behemoth, accusing the company of selling customers subprime mortgage derivatives that Goldman’s own financial masterminds bet against — for profit, of course. –KA
Your support is crucial…The New York Times:
The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers.
The suit also named Fabrice Tourre, a vice president at Goldman who helped create and sell the investment.
In a statement, Goldman called the S.E.C. accusations “completely unfounded in law and fact” and said the firm would “vigorously contest them and defend the firm and its reputation.”
The instrument in the S.E.C. case, called Abacus 2007-AC1, was one of 25 deals that Goldman created so the bank and select clients could bet against the housing market. Those deals, which were the subject of an article in The New York Times in December, initially protected Goldman from losses when the mortgage market disintegrated and later yielded profits for the bank.
As the Abacus deals plunged in value, Goldman and certain hedge funds made money on their negative bets, while the Goldman clients who bought the $10.9 billion in investments lost billions of dollars.
With an uncertain future and a new administration casting doubt on press freedoms, the danger is clear: The truth is at risk.
Now is the time to give. Your tax-deductible support allows us to dig deeper, delivering fearless investigative reporting and analysis that exposes what’s really happening — without compromise.
Stand with our courageous journalists. Donate today to protect a free press, uphold democracy and unearth untold stories.
Economic Justice
Elizabeth Warren (D-Massachusetts) and J.D. Vance (R-Ohio) have joined forces in a rare bipartisan effort to make top executives pay for their mistakes.
Lessons learned from the 2008 financial crisis show that taxpayer-funded blank checks to institutions do nothing to help those struggling
Because our banks aren't nationalized, its inability to work with Congress has resulted in another botched attempt at crisis management.
Its forced choice to bankroll hedge funds and other speculative ventures in repo market comes at a price to the middle class.
The Massachusetts senator and Democratic presidential contender wants to make it harder for big banks to prey on consumers.
The threat of a U.S. technology company taking up the model set by China's WeChat Pay and Alipay may now be materializing.
You need to be a supporter to comment.
There are currently no responses to this article.
Be the first to respond.