Goldman Sachs Group Inc was charged with fraud on Friday by the U.S. Securities and Exchange Commission in the structuring and marketing of a debt product tied to subprime mortgages.Needless to say, GS stocks are down sharply today. And while Goldman Sachs is the most egregious of the big financial firms that played the roulette wheel with trillions in taxpayer-backed dollars, it's not the only company that deserves fraud charged leveled against it.
The SEC alleged that Goldman structured and marketed a synthetic collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities, and which cost investors more than $1 billion.
It alleged that Goldman did not tell investors "vital information" about the CDO, called ABACUS. This included that a major hedge fund, Paulson & Co, was involved in choosing which securities would be part of the portfolio, and had taken a short position against the CDO in a bet its value would fall.
According to the SEC complaint, Paulson & Co paid Goldman $15 million to structure the CDO, which closed on April 26, 2007. Little more than nine months later, 99 percent of the portfolio had been downgraded, the SEC said.
The SEC said Goldman Vice President Fabrice Tourre was principally responsible for creating ABACUS. It also charged him with fraud.
More of this, please. If it's good enough for Bernie Madoff, it's good enough for these jokers.
Posts
7 comments:
I concur, we need to get back to people doing the right thing and not people doing something to make a quick buck. Maybe we could take a page out of China's book.
If that happened to a few CEO's you can bet they would straighten right the hell up.
I know you're a huge skeptic that the Obama admin will actually get anything done in terms of financial reforms, but what do you think of the news that President Obama says he will veto any bill that doesn't regulate derivatives?
If this administration has taught me anything it's to wait until you see it happen, otherwise anythings up in the air
Obama says he'll veto any bill that doesn't include derivatives. GOP says it will filibuster any bill that does.
Both of them can't be right. If the GOP is willing to filibuster the bill they will look like bank stooges, it's true.
But we will have no financial reform.
If Obama vetoes a watered down bill, he too looks like a bank stooge too.
But we will have no financial reform.
So at this point for us to get financial reform, one of the two sides has to be bluffing. I don't think it's true. Not with both sides on record in a hotly contested election year.
If anything, the odds of financial reform passing just went down significantly.
Wow, my assessment of the situation couldn't be any further. I think chances have gone up, not only because (like health care) if Obama DOESN'T get this done he will be perceived by the electorate as a failure but also because the GOP's idiot talking points are much weaker on this issue while the Dems have the wind at their back with recent legislative victories and the breaking news of the Goldman Sachs investigation.
I think you're a shade too skeptical on this one.
Possible. The Dems did pass health care reform when I thought it would fall apart, but right now all 41 GOP Senators are on the filibuster train.
If they decide that voters are going to be angrier at the Dems for passing health care reform then they will be at the Republicans for blocking financial reform, then they WILL filibuster this.
It doesn't matter if it's true or not, it matters what the GOP believes. In other words, this whole thing relies on the GOP being intelligent and not batshit crazy.
Hence why I'm skeptical.
There's one reason I'm more optimistic for this fight... the political optics for a brawl over financial reforms is great for the Donks. We'll see how tough and how long the Senate Republicans hang together as they bleed support from swing voters, instead of gaining it, right as campaign season kicks off. Frankly, I think the politics of a fight over finance reform is every bit as good as the politics of a fight over immigration reform.
Post a Comment