Wednesday, November 27, 2024
77.6 F
Orlando

U.S. Charges Goldman Sachs with Securities Fraud

Goldman Sachs, the Wall Street investment bank giant was charged with securities fraud by the Securities and Exchange Commission (SEC), accusing it of designing and selling mortgage investments that were designed to fail from the start.

The suit also names Fabrice Tourre, a vice president at Goldman who helped create and sell the investments.

New York Times: The focus of the SEC case, an investment vehicle called Abacus 2007-AC1, was one of 25 such vehicles that Goldman created so the bank and some of its clients could bet against the housing market. Those deals initially protected Goldman from losses when the mortgage market disintegrated and later yielded profits for the bank.

As the Abacus portfolios in the SEC case plunged in value, a prominent hedge fund manager (John Paulson) made money from his bets against certain mortgage bonds, while investors lost more than $1 billion.

Goldman said in a statement that the SEC’s charges were “completely unfounded” and vowed to “vigorously contest them and defend the firm and its reputation”.

Read the Whole Thing

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest Articles