Sense on Cents

The Washington Post just reports, SEC Accuses Goldman Sachs of Civil Fraud:

The Securities and Exchange Commission announced Friday civil fraud charges against Goldman Sachs and one of its vice presidents. The agency alleges that the company marketed complex subprime mortgage securities and failed to disclose to investors that a major hedge fund had bet against the securities.

Goldman Sachs shares fell 7.4 percent.

Goldman was down 7.4% and is now down 14%!! This opens an enormous can of worms for the entire industry.

What other dealers engaged in similar activities? Hedge fund manager John Paulson who made billions in shorting the sub-prime market is being tied to this investigation. If Paulson aided and abetted a fraud, then he deserves to pay in spades. Sense on Cents will be monitoring closely. If it is deemed that Goldman did commit fraud, all people involved are supposed to pay with more than just fines.

Let’s go back to March 2, 2010 when I appeared on CNBC’s Street Signs and warned of Goldman’s greatest risk (at the 3-minute mark of the video):

LD

This entry was posted on Friday, April 16th, 2010 at 11:21 AM and is filed under General, Goldman Sachs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.