U.S. Accuses Goldman Sachs of Fraud in Morgage Deals

Friday, April 16, 2010

The Securities and Exchange Commission says the firm defrauded investors by not disclosing conflicts of interest on mortgage-backed products it developed as the housing market was collapsing.

According to The New York Times, the SEC alleges Goldman sold mortgage investments that were designed to fail. At the same time, the company was placing bets against those investments that allowed it to profit as the market declined.

The AP reports that the SEC is trying to recoup Goldman's profits on the deal for investors. The agency says those investors lost more than $1 billion on Goldman's mortgage securities.

Goldman says the "SEC's charges are completely unfounded in law and fact" and promises to contest them in court.

Lawmakers in Washington are developing legislation that would crack down on Wall Street practices that helped cause the financial crisis. A proposal from Senate Democrats includes tougher rules for complex investments like those involved in the alleged Goldman fraud.

More in:

The WQXR e-newsletter. Show highlights, links to music news, on-demand concerts, events from The Greene Space and more.

Leave a Comment

Register for your own account so you can vote on comments, save your favorites, and more. Learn more.
Please stay on topic, be civil, and be brief.
Email addresses are never displayed, but they are required to confirm your comments. Names are displayed with all comments. We reserve the right to edit any comments posted on this site. Please read the Comment Guidelines before posting. By leaving a comment, you agree to New York Public Radio's Privacy Policy and Terms Of Use.

Follow WQXR 

Sponsored

Feeds