Moishe Alexander’s Blog

Moishe Alexander reviews Goldman Sachs Fraud

Posted on: April 28, 2010

Moishe Alexander has found that Federal authorities have accused Wall Street’s premier firm Goldman Sachs of perpetrating major fraud during the mortgage boom which prefaced the recent crash. This would mark a critical moment in the effort to reveal scams in one of the worst financial crisises in decades.

The fraud charges against this industry leader allege that the company broke numerous laws when it sold an intricate housing-related investment that was obvious would fail, costing $1-billion in losses.

The scam charges are the most serious blasting to date of the firm’s behavior in the leading up years to the most recent financial crisis, and since they arrive just as lawmakers are deciding on how to change the way the banking system operates, they could also drastically change the debate now happening in Washington.

News of the lawsuit, filed by the SEC, sent the firm’s shares diving almost 13% and destroyed $12.4-billion of its market value. Other bank’s shares, such as Citi and Bank of America, also paid a price as investors freaked out about the possibility of increased investigations and stronger regulation of the market.

In a statement, Goldman referred to the fraud charges as “completely unfounded” and was determined to “vigorously contest them.”

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