Goldman Sachs, Bankster Godfather

Goldman Sachs Sued by SEC for Fraud on Mortgage-Backed CDOs
By Joshua Gallu and Christine Harper


April 16 (Bloomberg) -- Goldman Sachs Group Inc. was sued by U.S. regulators for fraud tied to packaging and selling collateralized debt obligations that contributed to the worst financial crisis since the Great Depression.

Goldman Sachs misstated and omitted key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter, the Securities and Exchange Commission said in a statement today. The SEC also sued Fabrice Tourre, a Goldman Sachs vice president.

The SEC alleged that Goldman Sachs, led by Chief Executive Officer Lloyd Blankfein, structured and marketed CDOs that hinged on the performance of subprime mortgage-backed securities. The New York-based firm failed to disclose to investors that hedge fund Paulson & Co. was betting against the security and influenced the selection of securities for the portfolio, the SEC said. Paulson wasn’t accused of wrongdoing.

“The product was new and complex but the deception and conflicts are old and simple,” SEC Enforcement Director Robert Khuzami said in a statement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.” ........(more)

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Public horse whipping and then jail