German government considering action
(21 April 2010 – Europe) The German government is deciding whether or not to pursue legal action against Goldman Sachs, after news broke of fraud charges brought by the Securities and Exchange Commission (SEC) against the investment bank for selling collateralised debt obligations under false pretences.
The bank sold the CDOs without telling investors that they had been partly constructed with input from billionaire and hedge fund manager John Paulson, who also happened to be betting against them.
It has now been reported that the German government may take legal action against the New York based investment bank, as some of the CSOs were sold to a German bank, which in turn as an early victim of the financial crisis had to be rescued by a state owned bank KfW development bank.
A spokesperson for German Chancellor, Angela Merkel, said that the nation’s regulator BaFin will request information about the suit from the US Securities and Exchange Commission.
The spokesperson added that the government will, after a careful evaluation of the documents, then examine the legal steps required.
It has now been reported that the German government may take legal action against the New York based investment bank, as some of the CSOs were sold to a German bank, which in turn as an early victim of the financial crisis had to be rescued by a state owned bank KfW development bank.
A spokesperson for German Chancellor, Angela Merkel, said that the nation’s regulator BaFin will request information about the suit from the US Securities and Exchange Commission.
The spokesperson added that the government will, after a careful evaluation of the documents, then examine the legal steps required.
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