We had the cockroach story earlier today, now we have the mafia story. David Goldman (no relation…lol) in his seekingalpha piece says the SEC have nailed a 32-year old Goldman Sachs Vice President and he appears to be “singing”. David says investment banks are not like the mafia…….no one takes a twenty year sentence and keeps their mouth shut!
The SEC report says the Paulson hedge fund picked 100 RMBS it expected to experience credit events in the near future and informed Goldman Sachs that it wanted the identified RMBS bonds or bonds with similar characteristics included in a CDO. Goldman Sachs of course sold the CDO to investors whilst selling protection to Paulson. The investors lost $1bln – Paulson pocketed $1bln. Hmmmmmmmm
