My, oh my, why does everyone pick on Goldman Sachs?

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Goldman Sachs charged with fraud

US government charges bank with defrauding investors over alleged conflict of interest in mortage sales

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    * Associated Press
    * guardian.co.uk, Friday 16 April 2010 16.54 BST
    * Article history

The new Goldman Sachs HQ in Manhattan

The new Goldman Sachs Group Inc. headquarters at 200 West Street, in New York's lower Manhattan. Photograph: Brendan McDermid/REUTERS

The US government has charged Goldman Sachs with defrauding investors by failing to disclose conflicts of interest in mortgage investments that it sold as the housing market was faltering.

The Securities and Exchange Commission announced today that civil fraud charges would be brought against the Wall Street powerhouse and one of its vice-presidents. The agency alleges Goldman failed to disclose that one of its clients helped create and then bet against subprime mortgage securities that Goldman sold to investors.

Investors in the mortgage securities are alleged to have lost more than $1bn (£640m), the SEC noted.

The Goldman client implicated in the fraud is one of the world's largest hedge funds, Paulson & Co., which paid Goldman roughly $15m for structuring the deals in 2007.

Goldman Sachs shares fell more than 10% after the SEC announcement.

The SEC's civil lawsuit filed in the federal court in Manhattan was the government's most significant legal action related to the mortgage meltdown which ignited the financial crisis and helped plunge the country into recession.

A Goldman Sachs spokesman did not immediately return a call seeking comment.

More details soon.


http://www.guardian.co.uk/business/2010 ... ud-charges

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Lloyd Blankfein

Mr Zio Boy will have a busy weekend  :up: