Thursday, 24 July 2014
Last updated 2 hours ago
Jun 11 2010 | 11:47am ET
It’s apparently not a good time to be a negotiator for Goldman Sachs.
A top executive at the Wall Street giant said that no settlement of the Securities and Exchange Commission’s fraud lawsuit is near, just days after talks between the firm and an aggrieved hedge fund about another collateralized debt obligation broke down.
That hedge fund, Australia’s Basis Capital Management, turned around and sued Goldman for $1 billion.
Speaking today in Montréal, Goldman President Gary Cohn said there was no end in sight to the SEC case, which accuses Goldman of misleading investors in a CDO allegedly structured and marketed on behalf of hedge fund Paulson & Co.
“There’s no indications of anything at this point,” he said.
No indications of anything except, of course, a deeper look into Goldman’s CDO practices. The SEC is reportedly probing another deal—separate from both the Basis CDO and Paulson CDO—from 2006 in which Goldman was the only investor to buy credit protection.
“I read about it in the newspaper this morning, like you did,” Cohn said of the new probe.
Goldman is said to be eager to settle the SEC charges, which have dragged down its stock price. But the firm is loathe to accept a fraud charge, and wants the regulator to drop that allegation.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…