Prosecutors Subpoena Hedge Funds In Goldman CDO Probe

Sep 7 2011 | 12:30pm ET

The Manhattan District Attorney's office has subpoenaed several hedge funds that invested in collateralized debt obligations marketed by Goldman Sachs.

The D.A.'s office has expanded its inquiry, begun three months ago following a U.S. Senate subcommittee report that blasted Goldman's handling of CDO deals prior to the economic crisis. In addition to the hedge funds, other investors in the CDOs, notably Morgan Stanley, have received subpoenas in recent weeks, The Wall Street Journal reports.

The Manhattan prosecutors are seeking information about how Goldman sold them on the CDOs, many of which lost billions. Goldman, which settled Securities and Exchange Commission charges that it misled investors in a CDO allegedly structured and marketed on behalf of Paulson & Co. last year for $550 million, has not been accused of any criminal wrongdoing.

The Senate report focused on several CDOs that have already gotten Goldman into legal trouble with several hedge funds. Basis Capital Management has sued the firm over the Timberwolf CDO and hedge fund Dodona I LLC over the Hudson CDO.


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note