That's what Goldman Sachs sold some of its customers: a CDO called Abacus 2007-AC1. Abacus was touted as a good deal. But customers were not told that it was a good deal for John Paulson, a very, very good customer of Goldman Sachs. In fact, Paulson had selected the securities that made up Abacus 2007-AC1 and he had selected securities that he thought would fall quite far and soon. Goldman neglected to tell its more average customers that they were buying securities picked to fail. Paulson made $1 billion on the deal and the other customers lost about the same.
Surprisingly, the SEC is going after Goldman; they have charged the firm with fraud. How far will the SEC take this case?
Surprisingly, the SEC is going after Goldman; they have charged the firm with fraud. How far will the SEC take this case?
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