Monday, 30 March 2015
Last updated 3 hours ago
May 7 2010 | 3:30am ET
Goldman Sachs has determined that it must settle charges that it defrauded investors in a collateralized debt obligation it structured for hedge fund Paulson & Co.
A deal with the Securities and Exchange Commission, which sued Goldman for allegedly failing to disclose Paulson’s role in the construction of the CDO or the hedge fund’s short interest in it, could cost Goldman between $1 billion and $5 billion, according to Fox Business. The latter figure is five times the total losses in the CDO, ABACUS-AC1-2007.
Goldman has denied any wrongdoing. The firm plans to approach the SEC about settlement talks soon after it releases its response to the charges.
“We can’t be going to war with the SEC,” a senior executive at Goldman told Fox’s Charles Gasparino.
The question is whether the SEC is as eager for a settlement as Goldman. According to Fox, the regulator is uninterested in a slap on the wrist, and could demand the scalp of a top Goldman executive, including CEO Lloyd Blankfein.
Goldman is also facing a half-dozen shareholder lawsuits stemming from the case.
According to the SEC, Paulson paid Goldman $15 million to structure and market the Abacus synthetic CDO and played a “significant role” in choosing the residential mortgage-backed securities that went into it. The New York-based hedge fund then shorted the CDO, buying credit default swaps from Goldman itself.
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…