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

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...