Top Goldman Leaders Said to Have Overseen Mortgage Unit

Source: NY Times

Top Goldman Leaders Said to Have Overseen Mortgage UnitBy LOUISE STORY
Published: April 18, 2010


The Securities and Exchange Commission filed a civil fraud suit on Friday that essentially says that Goldman built the financial equivalent of a time bomb and then sold it to unwitting investors. Mr. Egol, 40, was not named in the S.E.C.’s suit.

Mr. Tourre was the only person named in the S.E.C. suit. But according to interviews with eight former Goldman employees, senior bank executives played a pivotal role in overseeing the mortgage unit just as the housing market began to go south. These people spoke on the condition that they not be named so as not to jeopardize business relationships or to anger executives at Goldman, viewed as the most powerful bank on Wall Street.

According to these people, executives up to and including Lloyd C. Blankfein, the chairman and chief executive, took an active role in overseeing the mortgage unit as the tremors in the housing market began to reverberate through the nation’s economy. It was Goldman’s top leadership, these people say, that finally ended the dispute on the mortgage desk by siding with those who, like Mr. Fabrice and Mr. Egol, believed home prices would decline.

Goldman’s top ranks changed its stance on housing in December 2006. ...But former Goldman employees said those traders benefited from the short positions that were given to them. And their trading was tightly overseen by senior executives.





Read more: http://www.nytimes.com/2010/04/19/business/19goldman.html?hp

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Looks like the rot in Goldman Sachs went all the way to the top.

Hank Paulson Goldman CEO>>>> Republican Treasury Sec.>>>>>>>>>Trillion dollar bailout on exit.

Those boys are not going to hang around to face the music, trust me on this.

Source: New York Times

Top Goldman Leaders Said to Have Overseen Mortgage Unit
By LOUISE STORY
Published: April 18, 2010

Tensions were rising inside Goldman Sachs.

It was late 2006, and an argument had broken out inside the Wall Street bank’s prized mortgage unit — a dispute that would reach all the way up to the executive suite.

One camp of traders was insisting that the American housing market was safe. Another thought it was poised for collapse.

Among those who saw disaster looming were an effusive young Frenchman, Fabrice P. Tourre, and his quiet colleague, Jonathan M. Egol, the mastermind behind a series of mortgage deals known as the Abacus investments.

Their elite mortgage unit is now at the center of allegations that Goldman and Mr. Tourre, 31, defrauded investors with one of those complex deals.

Read more: http://www.dailykos.com/storyonly/2010/4/19/858603/-WSJ:SEC-Wall-St.-Fraud-Probes-Intensify,-U.S.-Towns-Pillaged-%28updated%29

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SEC Investigating Other Soured Deals
By CARRICK MOLLENKAMP, SERENA NG, SCOTT PATTERSON and GREGORY ZUCKERMAN
Wall Street Journal
April 19, 2010

The Securities and Exchange Commission, after having hit Goldman Sachs Group Inc. with a civil fraud charge, is investigating whether other mortgage deals arranged by some of Wall Street's biggest firms may have crossed the line into misleading investors.

The SEC's case against Goldman Friday has exposed an open secret on Wall Street: As the housing market began to wobble a few years back, some big financial firms designed products aimed at allowing key clients, such as hedge funds, to bet on a sharp housing downturn...

http://online.wsj.com/article/SB10001424052748704508904575192294041013802.html

will make this company and all its cohorts pay in a big way.

31 is too young to be doing this kind of work. And he was much younger when it was going on.

and all the experience that time brings.

:D