The product was new and complex, but the deception and conflicts are old and simple,” Robert Khuzami, the director of the S.E.C.’s division of enforcement, said in a statement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”
Via New York Times
The moot questions seem to be
1. Did Goldman know that toxic debt were the underlying securities in their synthetic derivatives ? Most obvious answer seems to be YES :-(
2. If so, did they tell their clients about the nature of the underlying debt ? obviously NO !
3. Did the people who chose those derivatives for Goldman go ahead and short these very same derivatives ? That is what made them Billionaires and made Goldman's clients loose Billions. Which means knowledge was not only there, but was also utilised elsewhere !!
4. After all these, and after 100s and 1000s of people lost their entire life's savings, Goldman's executives have made hundreds of thousands on bonuses
5. Even in this case will SEC prevail ?
One interesting video on this case; Max Keiser takes offense to Goldman Sachs story
Even in this video, the people arguing FOR Goldman are calling it too big to fail !
What do you think ?
No comments:
Post a Comment