Saturday, April 17, 2010

Goldman Sachs Takes Down Financial Sector

Goldman Sachs on Friday was named as defendant in a civil law suit on fraud allegations. To sum up the case Goldman Sachs and partnered with John Paulson and his hedge fund to design a portfolio to sell to investors while Paulson and his hedge fund shorted this exact same portfolio. Paulson and his hedge fund had no role in the marketing or selling of these CDO's so no wrong doing was done on their part.

What people forget to mention is that also on Friday the SEC released an independent examiners report that they completely dropped the ball and should have closed Lehman months before they collapsed. People believe the Goldman case was announced Friday to delfect attention from Lehman report.

The announcement of the case against Goldman Sachs brought down the entire financial sector with Goldman shares dropping over 10%, and Bank of America shares dropping 5% (a UASBIG holding).

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