Goldman Sachs with a Cameo Appearance by Jon Corzine of former MF Global

Goldman Sachs with a Cameo Appearance by Jon Corzine of former MF Global

The Securities and Exchange Commission settled a securities fraud action against Goldman Sachs & Co for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation ("CDO") structured and marketed to investors.

The securities giant paid $550 million to settle charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse causing an estimated loss to its customers of $1 billion.

(Scroll down to download the charging and settlement documents)

Of the $550 million to be paid by Goldman in the settlement, $250 million would be returned to harmed investors through a Fair Fund distribution and $300 million would be paid to the U.S. Treasury.

Although the SEC was taking bows over the record dollar settlement Wall Street insiders believe that Goldman scored a major victory in its legal battle with the regulator. One Wall Street insider commented, "By any measure this settlement was a big win for Goldman because the fraud charges were removed from the settlement and consent documents, the settlement required no admission of guilt and Henry Paulson, the former Chief executive of Goldman and former US Secretary of Treasury was allowed to keep an estimated $1 billion in profits he made personally by, in effect, betting that the long positions the investors, in the ABACUS 2007-AC1 CDO, that were sold would fail."

Another former Goldman chief executive officer, Jon Corzine, appears in this film. His company, MF Global, filed for bankruptcy last October with $1.2 billion in customer money missing.

Download the charging and settlement documents here;

"SEC v Goldman Sachs" on Scribd http://www.scribd.com/doc/77610854

"Consent SEC v Goldman Sachs" on Scribd http://www.scribd.com/doc/77612550

Category:

News & Politics

Tags:

• Sec
• Citigroup
• regulatory capture
• rakoff
• recidivist offender
• investor confidence
• Wall Street greed
• corruption
• CitiGroup
• MF
• Global
• Jon
• Corzine
• ABACUS