April 25 2010
A US Senate panel has revealed emails that show Goldman Sachs Group Inc profited massively by engaging in the sale of investments that were structured to fail.
Senators say the Wall Street giant investment bank bundled toxic mortgages into complex financial instruments. It then manipulated credit rating agencies to give excellent ratings to these products.
The head of the Senate panel, Democrat Carl Levin of Michigan claims that Goldman sold the toxic securities to its investors.
In some cases, the company bet against the financial products it sold to investors and profited at the expense of its clients.
Goldman’s executives are testifying in Washington this week. The firm denies any wrongdoings.
The Securities and Exchange Commission sued Goldman Sachs on April 16 for civil fraud lawsuit alleging the bank didn’t tell investors in a collateralized debt obligation that hedge-fund firm Paulson & Co. helped structure the deal and was planning to bet against it.
The e-mails were released by Levin prior to the Tuesday’s hearing on Capitol Hill. Source
Goldman Sachs insists it made $1.2bn loss on sub-prime market
Emails released by Congress sub-committee imply Goldman bankers boasted about making ‘serious money’ on mortgage defaults
Goldman received $10bn of government bail-out money and converted to a commercial bank at the height of the crisis, giving it access to cheap Federal Reserve funds: “Goldman’s been singled out because clearly there’s something of a smoking gun here and they’re top of the heap.”On Saturday, the senate committee’s chairman, Carl Levin, a veteran Democratic lawmaker, struck a combative tone by releasing a collection of internal Goldman emails that, he said, showed Goldman made “a lot of money by betting against the mortgage market”, while millions of Americans were losing their homes to bailiffs.
For the entire story go HERE
Faced with a $1bn (£650m) fraud prosecution is peanuts considering they got $10 billion from US taxpayers. They still made a $9 billion profit even if they loose the case. Maybe they should pay back all they stole from taxpayers.
And if they didn’t make profit one of their friends certainly did. So if Paulson and Co made a lot of money, why not others?
Maybe the rest of the profiteers just haven’t been found yet.
Related
Paulson and Co. made a $3.7 billion profit on collapse of subprime mortgage market
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