Goldman CDO Probe Goes Criminal

Apr 30 2010 | 12:41pm ET

In addition to civil fraud charges and a highly-publicized dressing-down on Capitol Hill, Goldman Sachs executives have another—potentially more serious—headache to deal with. Federal prosecutors in New York have launched a criminal investigation into Goldman’s structuring and marketing of a collateralized debt obligation that cost investors $1 billion.

For the time being, the criminal probe involves only the U.S. Attorney’s Office in Manhattan, and not the Federal Bureau of Investigation or other federal agencies. Criminal probes stemming from Securities and Exchange Commission charges are fairly common and do not always lead to criminal charges being filed.

The SEC on April 16 accused Goldman of misleading investors in a synthetic CDO, ABACUS-2007-AC1, that it structured and marketing for the hedge fund Paulson & Co. The Wall Street giant is accused of not telling investors that Paulson played a role in choosing the residential mortgage-backed securities that went into the CDO or that Paulson planned to bet against the CDO.

Goldman has denied any wrongdoing, and the firm’s top executives on Tuesday reiterated their belief that the firm did nothing wrong at a Senate committee hearing.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Sass Program To See Brooklyn College Students Run Hedge Fund

Nov 26 2014 | 7:56am ET

They say you learn by doing, so the students at Brooklyn College will learn to run...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.