- Paulson & Co tells investors it was ‘open’
- Paulson & Co. Says Its Role in Goldman CDO Was ‘Appropriate’
- Suspecting politics in Goldman Sachs charges, Rep. Issa asks SEC for information
- It’s Lloyd’s of Washington next week
- Goldman takes aggressive line on fraud claims after bumper profits
- Goldman mounts defense on SEC charges, saying clients knew its products well
- Goldman Sachs Says SEC Case Hinges on Actions of One Employee
- Bank Says Losses Prove No Ill Intent
- Goldman Sachs Donations Loom Over Republicans, Democrats Alike
- Goldman Gives More to Candidates in March Than Prior 14 Months
- Goldman Splits From Pack on Buybacks
- SEC case comes to rare aid of ’sophisticated investors’
Paulson & Co tells investors it was ‘open’ – FT
“Paulson was transparent and open regarding its concerns about the mortgage market which were driven by analysis of publicly available data,” the letter states. “We believed that the two-year adjustable rate mortgages made to lower income borrowers with poor credit history, little or no documentation, no down payment and rates that would shortly reset at usurious interest rates set the stage for significant delinquencies and foreclosures, thus eroding the value of these securities.”….
Paulson & Co. Says Its Role in Goldman CDO Was ‘Appropriate’ – Bloomberg
Paulson & Co., the hedge fund that made $15 billion betting on the decline in subprime mortgages in 2007, said its role in helping to design a mortgage-linked deal sold by Goldman Sachs Group Inc. was “appropriate and conducted in good faith,” according to a letter sent to investors…..
“We have always been forthright in expressing our opinions, and we never misrepresented our positions,” John Paulson, the firm’s founder, wrote in the letter dated April 20. “All our dealings were through arms-length transactions with experienced counterparties who had opposing views based on all available information at the time.”…..
“When we expressed our concerns about the mortgage markets, many of the most sophisticated investors in the world, who had analyzed the same publicly available data we had, were fully convinced that we were wrong, and more than willing to bet against us,” he wrote. He added that at the time, Paulson & Co. was not known as an experienced mortgage investor……
Suspecting politics in Goldman Sachs charges, Rep. Issa asks SEC for information – Washington Post
Republicans on the House Oversight and Government Reform Committee are looking into whether the Securities and Exchange Commission was motivated by politics in filing civil charges against Goldman Sachs last week. Rep. Darrell Issa (R-Calif.) sent SEC Chairman Mary Schapiro a letter Tuesday asking for documentation of “any sort of prearrangement, coordination, direction from, or advance notice” between the SEC and the Obama administration or congressional Democrats…..
It’s Lloyd’s of Washington next week – NY Post
He wasn’t named in the Securities and Exchange Commission’s fraud suit against Goldman Sachs, but CEO Lloyd Blankfein nonetheless will find himself on the hot seat about the matter when he goes to Washington to testify before a congressional panel about toxic mortgage securities.
Sources tell The Post that Blankfein has accepted an invitation to testify Tuesday before the Senate Permanent Subcommittee on Investigations, which has collected some 10 million documents, including e-mails, mortgage agreements and detailed blueprints of mortgage securities, from Goldman as part of its probe…..
Goldman takes aggressive line on fraud claims after bumper profits – FT
Goldman said for the first time that the banker at the centre of allegations that it had deceived investors in a complex mortgage-backed product had indicated that a US hedge fund was betting against – or “shorting” – the trade.
That London-based banker, Fabrice Tourre, has been placed on paid leave and, at the bank’s request, been deregistered with the Financial Services Authority as Goldman works to reassure investors and clients that it remains a reliable partner…..
Goldman mounts defense on SEC charges, saying clients knew its products well – Washington Post
In legal lingo, it’s called the “big boys defense.”
In rebutting a federal lawsuit claiming that it defrauded its clients, Goldman Sachs argues that its customers were big financial firms, intimately familiar with the complex financial securities the bank was selling. The Securities and Exchange Commission says that doesn’t matter: Goldman omitted details when selling the investment, and these might have deterred customers from placing their bets, which turned on the future health of the housing market, the agency charges……
Goldman Sachs Says SEC Case Hinges on Actions of One Employee – Bloomberg
Goldman Sachs Group Inc. said the U.S. fraud case against the firm hinges on the actions of the employee it placed on paid leave this week.
Fabrice Tourre, the 31-year-old Goldman Sachs executive director who was accused of misleading investors about a mortgage-linked investment in 2007, will also be de-registered from the Financial Services Authority, a spokeswoman at the firm in London said yesterday……
Bank Says Losses Prove No Ill Intent – NYT
…..Goldman now says it lost roughly $100 million on the Abacus investment, which is at the center of accusations that Goldman and Mr. Tourre defrauded investors in the deal.
Goldman points to its losses on Abacus 2007-AC1 and, indeed, in the broader mortgage arena, as evidence that it did not create a mortgage security that was intended to fail, as the Securities and Exchange Commission claims. But interviews with people with knowledge of Goldman’s trading paint a more nuanced picture of the bank’s losses — and profits — in mortgage trading during that time…..
Goldman Sachs Donations Loom Over Republicans, Democrats Alike – Bloomberg
Contributions from Goldman Sachs Group Inc. employees threaten to become toxic campaign assets for both political parties facing elections this year.
“It’s going to be hard for Democrats to make the accusation about Republicans because the president raised so much Goldman Sachs money,” said John Feehery, a Republican political strategist who advised former House Speaker Dennis Hastert……
Goldman Gives More to Candidates in March Than Prior 14 Months – Bloomberg
Employees of Goldman Sachs Group Inc., which is facing a fraud suit by the Securities and Exchange Commission, gave more money to congressional candidates last month than in the previous 14 months combined.
Goldman’s political action committee contributed $290,500 in March, compared with $209,500 between Jan. 1, 2009, and Feb. 28, 2010, according to Federal Election Commission reports. Donations included $15,000 apiece to Republican House and Senate fundraising committees, and contributions to lawmakers from both parties and their leadership political action committees……
Goldman Splits From Pack on Buybacks – WSJ
…..Goldman on Tuesday also broke with banking peers by revealing it spent $2.3 billion buying back stock in the first quarter. The move, approved by regulators, came even as the government has said it wants banks, especially big, systemically risky ones, to hold more capital, which acts as a cushion to absorb losses.
Because of the government stance, and uncertainty over how much capital will be ultimately required, other banks have held off on actions that could deplete or divert capital. J.P. Morgan Chase, for example, cited that last week as one reason why it isn’t ready to increase its dividend…..
SEC case comes to rare aid of ’sophisticated investors‘ – FT
The civil fraud complaint against Goldman Sachs puts US securities watchdogs on unfamiliar ground because it questions the terms of a private transaction between institutions that are normally viewed as capable of looking after themselves.
The Securities and Exchange Commission’s enforcement division usually concentrates its firepower on cases involving public securities and retail investors, where the disclosure standards and duties of care are the highest……
Tags: CDO, fraud, Goldman Sachs, John Paulson, Lawsuit, Lloyd Blankfein, Paulson & Co, Politics, SEC, Subprime mortgages, Witchhunts
