Goldman Sachs Now Faces Criminal Charges

Posted by Al

By Contributing Author Gabe Rodriguez

Charges seem to be mounting against Goldman Sachs reports one of the payday advance lenders Pay1Day.com. Goldman Sachs accused of defrauding investors with selling securities tied to subprime mortgages. Recently the Securities and Exchange Commission (SEC) charged Goldman Sachs with civil fraud regarding the alleged ties to the subprime mortgage collapse. The civil charge alleges that John Paulson (Paulson & Co.) worked with Goldman Sachs to hedge funds in order to “bet” on the subprime mortgage collapse, with the 2007 sale of “collateralized debt obligation” (CDO). Goldman Sachs allegedly did not disclose conflicts in the CDO’s, and were betting on the fact that their value would plummet. When the CDO’s value finally crashed John Paulson stood to make approximately $1 billion off of the crash.

Currently the SEC’s charges are only one part of Goldman Sachs mounting legal woes. Last week Federal Prosecutors began a criminal investigation into Goldman Sachs and its employees regarding their alleged securities fraud. Other legal actions against Goldman Sachs and its employees seem to be mounting as well, including the demand of an investigation from UK Prime Minister Gordon Brown. On a State level, Richard Blumenthal (Attorney General, Connecticut) stated that he will be looking into the SEC’s charges, which may lead to a formal state investigation. There are also mounting cases from individual investors who claim that Goldman was not transparent with information about “Abacus”, the mortgage security which is currently under investigation by the SEC.
There are some recent news reports which claim that our senators need to dig a little deeper to find the true culprits behind the subprime mortgage collapse, alleging that those responsible may not be (only) Goldman Sachs.

A recent report from BigGovernment.com states:
“But if Senators were really interested in finding out the cause of the housing bubble, they would call one Eric Stein to the dais.
Mr. Stein is currently that Deputy Secretary of Treasury for consumer protection and is likely to head the vastly powerful Consumer Bureaucracy currently being pushed by big banks and Wall Street. But prior to his appointment to Treasury, Mr. Stein the bag man for the Center for Responsible Lending and its many Self Help subsidiaries, was singly responsible for more bad loans than all Goldman employees together.”
Regardless of opinion, this will be a legal case to keep a close watch on.

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