Goldman Sachs charged with solitary case

Liulanchang, the Securities and Exchange Commission (hereinafter referred to as the "SEC") April 16 accused Goldman Sachs of alleged fraud to hit the U.S. stock market, despite the Goldman issued a statement to defend the shock wave is still spreading, April 19, Asian stock markets fell. The SEC accuses Goldman Sachs and one of its vice-presidents of cheating investors when the US housing market began to fall into recession, saying Goldman did not disclose important information about the CDO to investors when it sold a collateralised debt obligation (CDO) based on residential subprime securities (RMBS).　　In particular, the role of a large hedge fund company in the selection process of the CDO asset pool has not revealed that the fund has been shorting the CDO. SEC polemic a high-profile response, Goldman Sachs immediately announced two statements on the website, put forward four defense reasons: itself also in the transaction losses of 90 million U.S. dollars; investors are experienced institutions and aware of the risks of related products; hedge funds ' involvement in selecting the product's underlying assets is the norm in the industry　　The market maker cannot disclose the identity of the other party to the trading party. "If there is not sufficient evidence, the SEC, the regulator of America's top securities industry, should not be so high-profile," said a senior lawyer familiar with American law at a domestic law firm on April 19, but said the case involved so many stakeholders that it was not yet possible to assert who would prevail. "　　The result of the final game is likely to be a settlement between the two sides. Citigroup published a study saying it was a civil lawsuit rather than a criminal lawsuit, suggesting the result could be a high fine. This suggests that the government has not found enough evidence to bring criminal proceedings, but it cannot rule out the possibility of a future move.　　　　The U.S. Department of Justice, not the SEC, has the right to initiate criminal proceedings. Paulson, the big hedge fund that the SEC cited in the indictment, was third in the US. Notably, Paulson's hedge fund was not prosecuted. By betting that the US housing market will collapse, the fund is making a full profit, including 1 billion of dollars allegedly profiting from the SEC's alleged deal.　　The SEC said investors could lose more than 1 billion dollars in the deal.　　The SEC said that in early 2007, Paulson's hedge fund asked Goldman to build a short selling deal against its own selected mortgage-backed securities, so Goldman asked the "independent third party" ACA Asset Management to design a CDO called Abacus.　　In fact, Mr Paulson was also involved in the selection of product base assets, but in the product materials Goldman Sachs said its underlying RMBS assets were selected by ACA, a professional analyst, without revealing to investors that Paulson's hedge fund would benefit from the RMBS default, and that Paulson played an important role in RMBS's selection. The SEC argued that, after taking part in the portfolio selection, Paulson effectively shorted RMBS assets through credit-swap contracts, and given the economic benefits of short-selling, Mr Paulson had the incentive to opt for RM that it estimated would appear in the near future with credit problemsBS. At the age of 31, Goldman Sachs vice President Fabris-Torre (Fabrice Fabrice) is responsible for the design and sale of the product, the SEC also listed as a defendant. The SEC said Torre also misled ACA into thinking that Paulson's investments were intimately linked to the interests of ACA, and that in fact their interests were in serious conflict.　　ACA also invested $951 million in the product after he believed Mr Paulson had also looked at the underlying assets of the product. After the deal was completed on April 26, 2007, Paulson paid Goldman 15 million dollars for the design and marketing of Abacus products.　　Six months later, the product's underlying assets were exposed to problems, and by October 24, 2007, 83% of RMBS had been downgraded to January 29, 2008, and 99% of its assets were downgraded. Goldman Sachs claims that the SEC's allegations were not legally tenable and untrue.　　"The loss of any investor is due to the overall poor performance of the industry as a whole, not because some of the securities were eventually selected for the reference portfolio, or how they were selected," Goldman Sachs said in a statement. In a multinational investigation, lawyers familiar with US law say the US investment bank, such as Goldman Sachs, is already extreme, "so while the SEC has a stake in Wall Street, the democratic government faces midterm elections to sue Goldman Sachs for warning on Wall Street to please the American people, has also created momentum for the DPJ to push through the Financial regulation bill. Tao, managing director of Credit Suisse and Asia's chief economist, wrote that the Goldman incident had been a public outrage and provided a pretext for a sharp tightening of regulation, but that Goldman Sachs was the core of the US competitiveness, with its connections across political and business corners, so Goldman would not be chased by the U.S. government like Toyota,　　It may end up being a fine. In the study, Citi said the two key risks facing Goldman Sachs were reputational risk and other prosecutions that could be related to the case.　　The SEC's allegations relate to only one product, and the key is whether the case is isolated, which has a big impact on Goldman's reputation. Outside the US, Goldman could also be "besieged" in Europe.　　German and British officials have said they will seek details of the SEC's investigation into Goldman's business activity, which could be a prelude to legal action by the two countries against Goldman. The German Industrial Bank (IKB), which repeatedly received government aid during the financial crisis, was one of Abacus's investors. The SEC said IKB eventually decided to invest 150 million dollars because ACA, an "independent third party", was also involved in the deal.　　IKB, which was on the verge of collapse in 2007, has applied for a total of at least € 10 billion of bail-outs. RBS, which has been largely nationalised by the British Government, has been involved in the takeover of ABN Amro. ACA, the parent of ACA Asset Management, and Goldman Sachs bought the CDs issued by the Dutch silver Needle against Abacus, which led to the eventual payment of $841 million to Goldman Sachs, and the huge amount of compensation is ultimately paid by RBS. Notably, it is reported that Goldman Sachs, already in the spotlight, will also be handing out hefty bonuses. The British Sunday Times reported 18th that Goldman is prepared to pay more than 3.5 billion pounds of quarterly bonuses to its employees.