Commission Outlines Goldman Sachs Subprime Dilemma in Financial Crisis
Goldman came under fire following the crisis by allegedly selling clients on mortgage-backed securities and other various financial instruments it was allegedly betting against on the side.
Palm Coast, FL – January 28, 2011 – One of the many villains in the Financial Crisis Inquiry Commission report out Thursday is Goldman Sachs (GS: 164.03 0.00%), the Wall Street giant that, according to page 235 of the report, recognized the delusion in the subprime mortgage market and decided to short it before the crash in 2008.
Goldman came under fire following the crisis by allegedly selling clients on mortgage-backed securities and other various financial instruments it was allegedly betting against on the side. Bond insurer ACA Financial Guaranty filed suit in January seeking $30 million in compensation and $90 million in punitive damages from how Goldman marketed the synthetic collateralized debt obligation named ABACUS.
In 2010, Basis Yield Alpha Fund, a hedge fund and Goldman client, sued the firm alleging it was frauded out of $11.25 million in investments in the Timberwolf CDO.
Read More >>>> HousingWire [Jan 27, 2011]
Insider trading?
"recognized the delusion in the subprime mortgage market and decided to short it before the crash in 2008."
Is that an example of insider trading which supposed to be illegal.
Was Goldman Sachs responsible to disclose such information to the public before they traded on such information?