Goldman Sachs 11 hour grilling
(30 April 2010 – US) Goldman Sachs faced almost an eleven hour hearing yesterday as a succession of Goldman officials, including current and former executives, defended their actions and the products they sold to clients, which the US Senate panel described as ‘crap’, ‘junk’ and ‘lemons’.
The targets of the US Senate included the bank’s chief executive officer Lloyd Blankfein, bond trader Fabrice Tourre and five other current and former executives, all whom justified their actions by saying that they were creating a market for professional investors with different needs.
Mr Blankfein admitted that ‘financial institutions let the public down’, prior and during the global financial crisis. He also commmented that internal bank emails, which show employees boasting about the controversial deals where the bank netting high windfalls, were ‘unfortunate’.
Mr Blankfein responded to the Senates inquiry about the derivates market and the likelihood that it had grown unwieldy and reckless, saying that ‘clearly, the world needs more regulation’.
The US government’s Securities and Exchange Commission has also filed significant legal actions related to the global financial crisis against Goldman Sachs, saying the investment bank sold mortgage investments without disclosing to buyers that they were created with input from a client who was betting on them to fail.
The bank sold 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 CDOs were sold to a German bank, which in turn was an early victim of the financial crisis and had to be rescued by a state owned KfW development bank.
A Michigan Democrat asked the executive who was responsible for the investment bank’s mortgage unit, ‘how about the fact that you sold hundreds of millions after your people knew it was a shitty deal?’ 'Does that bother you at all?’.
In an address to Mr Blankfein he also asked, ‘the bank is out their looking around for buyers of stuff, whether it's junk or not junk, where Goldman is betting against what its selling. You're not troubled by that?'.
Mr Blankfein replied saying that he was not troubled by the fact that the bank market-make as principal … and that when somebody sells, they sell to the bank, or when they buy, they buy from the bank.
Mr Blankfein admitted that ‘financial institutions let the public down’, prior and during the global financial crisis. He also commmented that internal bank emails, which show employees boasting about the controversial deals where the bank netting high windfalls, were ‘unfortunate’.
Mr Blankfein responded to the Senates inquiry about the derivates market and the likelihood that it had grown unwieldy and reckless, saying that ‘clearly, the world needs more regulation’.
The US government’s Securities and Exchange Commission has also filed significant legal actions related to the global financial crisis against Goldman Sachs, saying the investment bank sold mortgage investments without disclosing to buyers that they were created with input from a client who was betting on them to fail.
The bank sold 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 CDOs were sold to a German bank, which in turn was an early victim of the financial crisis and had to be rescued by a state owned KfW development bank.
A Michigan Democrat asked the executive who was responsible for the investment bank’s mortgage unit, ‘how about the fact that you sold hundreds of millions after your people knew it was a shitty deal?’ 'Does that bother you at all?’.
In an address to Mr Blankfein he also asked, ‘the bank is out their looking around for buyers of stuff, whether it's junk or not junk, where Goldman is betting against what its selling. You're not troubled by that?'.
Mr Blankfein replied saying that he was not troubled by the fact that the bank market-make as principal … and that when somebody sells, they sell to the bank, or when they buy, they buy from the bank.
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