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

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note