Monday, 26 January 2015
Last updated 2 days ago
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.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…