Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.
The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers.
The suit also named Fabrice Tourre, a vice president at Goldman who helped create and sell the investment.
In a statement, Goldman called the S.E.C. accusations “completely unfounded in law and fact” and said the firm would “vigorously contest them and defend the firm and its reputation.”
1. Delighted to see this happen. It is the greedy and self-serving on Wall Street who have given a bad name to all capitalism. The enemies of this nation and the free world have leapt upon the opportunity provided by the untrustworthy to denigrate all capitalists and paint them with the same brush.
2. My question is: “When, also, will the real estate brokerage firms that have ‘in-house’ mortgage companies also be held accountable?”
Many mega brokers and others freely admit that their real profit comes from the self-serving “in-house mortgage company” and not from commissions on sales.
This blatant conflict of interest has gone on far too long.
Granted there are mandatory “disclosures” required by law, but they are painfully inadequate.
3. It is “curious”, indeed, that the owners of these real estate firms as well as the trade association to which they belong, the National Association of Realtors (one of the largest PAC contributors in the United States), as well as the officers of FannieMae and FreddieMac, have not been indicted for their alleged complicity in the financial breakdown.
4. Bluntly, the government was warned years ago that FannieMae and FreddieMac were houses of cards ready to tumble at any instant.
5. Hopefully, the Justice Department at the request of various government agencies is investigating these matters and will bring those responsible to justice.
6. The damage that has been done to our country and each and every one of us is not only financial, it has opened the door for those who would destroy the very principles upon which our nation was founded.
Should this not be treated as a criminal suit? Civil charges will act as only a slight tap on the wrist. After all, these people stole a huge hunk of the wealth of America.
I want to know who in the government was aware of this and when did they learn it……?
Don
It’s just big government trying to impose its will on the free market. Activist judges when buyers should have known.
Obama, being the socialist that he is, trying to make visible what George Bush knew was an error. And now, wealthy people are the scapegoat.
Goldman Sachs IS a fraud! Every one of their executives belongs in prison for what they did…….and I don’t mean a “country club prison.”
Cennydd,
Instead, Henry Paulson became Secretary of the US Dept. of Treasury.