Goldman Sachs accused of misleading investors

[.Morticia.]

I don't even know why this is an issue, it's how business is done :shrug:

Goldman Sachs accused of misleading investors

14 April 2011 Last updated at 07:15 ET

A Goldman Sachs spokesman said the testimony given by its executives had been "truthful and accurate" Continue reading the main story
A US Senate probe says Goldman Sachs misled investors selling mortgage-backed investments it knew would fail.

The Senate Permanent Subcommittee on Investigations has spent two years looking at the behaviour of Wall Street banks at the time of the credit crisis.

It said Goldman had also misled Congress in a testimony given in 2010.

A Goldman Sachs spokesman said the testimony given by its executives had been "truthful and accurate", and the bank took the issues raised seriously.

Complex deals

On Wednesday, the Senate subcommittee said it had found "a variety of troubling and sometimes abusive practices" by banks in 2007 as the credit crisis began.

The report said that Goldman marketed four sets of complex mortgage securities to banks and other investors, but failed to tell them the investments were very risky.

In addition, the report said the bank did not mention that it was itself betting that the investments' value would fall, indicating it sold products to clients it did not believe in backing itself.

Carl Levin, the Democrat who heads the subcommittee, told a press briefing that Goldman had "exploited" clients.

Goldman Sachs spokesman Michael DuVally said that while the company disagreed with many of the report's conclusions, "we take seriously the issues explored by the subcommittee".

"We recently issued the results of a comprehensive examination of our business standards and practices, and committed to making significant changes," Mr DuVally said.

Previous probe

Goldman has already paid $550m (£337m) - without admitting or denying wrongdoing - to settle civil fraud charges over similar accusations relating to a large deal known as Abacus.

Senator Levin said on Wednesday the subcommittee had found new evidence that showed Goldman's misleading of investors went beyond that case.

He also raised doubts about the testimony given last year by a number of Goldman executives.

The US regulator the Securities and Exchange Commission (SEC) said at that time that Goldman had acknowledged that marketing material contained "incomplete information".

Senator Levin and his panel's report did not accuse the bank of illegal behaviour, but he said regulators at the SEC or the Department of Justice could take the investigation further.


http://www.bbc.co.uk/news/business-13077509

[kiki5711]

wall street is a huge gambling casino. except the money of the participants are not aware their money is being used to bet with on loser hand..

[egbert]

All those nasty remarks about Goldmann Sachs and Wall Street - it's just pure Anti-Semitism!

[Coito ergo sum]

Fraud in investment banking? Never!

That would be like saying there was graft, favoritism, and bribery in government....

[egbert]

[egbert]

[Coito ergo sum]

All the government need do is prosecute them...

[egbert]

All the government need do is prosecute them...

Never thought of that! I wonder why they don't?

[Coito ergo sum]

All the government need do is prosecute them...

Never thought of that! I wonder why they don't?

Because the government is very often corrupt. That's why we need "separation of government and private industry."

[Thumpalumpacus]

In other news, scientists have reported that water is wet.

[.Morticia.]

All the government need do is prosecute them...

umm, if you read the report the government is complicit in the fraud

http://levin.senate.gov/newsroom/suppor ... 041311.pdf

the executive summary makes it clear

The investigation found that the crisis was not a natural disaster, but the result of high-risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street

[Coito ergo sum]

All the government need do is prosecute them...

umm, if you read the report the government is complicit in the fraud

I know. You missed the irony.

Graft and corruption in government? Surprise surprise.

That must be why we need more government regulators making sure that business stays on the straight and narrow....

As I said above, we need "separation of government and private business" and the role of the State should be to prosecute criminals. "Government Motors" and "Nationalized" industries will never be prosecuted by the State because they are arms of the State.

[.Morticia.]

didn't miss the irony

I ignored it to make a point