Goldman executives squirmed under harsh questioning from lawmakers as the Goldman Sachs Senate Hearing opened Tuesday morning in New York. The Goldman Senate Hearing has been convened to grill seven current and previous Goldman executives about possible Goldman Sachs fraud in last year’s financial meltdown. Infamous Goldman personalities are expected to make appearances such as the suspect “Fabulous” Fabrice Tourre, and also the head honcho, Lloyd Blankfien.
Goldman Senate Hearing zingers
The Goldman Senate Hearing featured intense scolding from members of the Senate’s Permanent Subcommittee on Investigations. Some notable comments from committee members reported by Frank Ahrens at the Washington Post consist of Sen. Claire McCaskill telling the group of Goldman Sachs execs “You are the bookie. You are the house. You had less oversight than a pit boss in Las Vegas.” McCaskill was talking about Goldman’s role in creating a 2007 investment seeking quick money by betting against a synthetic collateralized debt obligation (CDO) that was intended to fail. Later as she referred to Goldman’s fee for setting up the bets, she asked them “What’s your vig?”.
The Goldman Senate hearing was preceded on Monday by the release of incriminating documents by Sen. Carl Levin, D-Mich., who chairs the committee. CNN reports that the documents suggest that Goldman Sachs bet far more aggressively against the nation’s housing market and its own customers than originally believed, collecting a pay day of as much as $3.7 billion in the process.
Fraud denied by Goldman Sachs
The Goldman Senate Hearing is the newest chapter in a huge drama that started with the sub-prime mortgage crisis, continued with the Securities and Exchange Commission accusing Goldman Sachs of fraud, and continuing with the release of incriminating e-mails from Goldman bond trader “Fabulous” Fabrice Tourre. Marketwatch.com said that testimony prepared for Blankfien’s appearance before the committee today denies Goldman Sachs fraud with claims that the CDO may look bad, but it fraud. Blankfien says that CDOs are too complicated for most people to understand, therefore the impression is that they are purposely created to confuse investors.
Goldman Senate Hearing and Tourre appearance
The Goldman Senate Hearing was “Fabulous” Fabrice Tourre’s first opportunity to publicly defend himself after being named as the focus of the SEC investigation into Goldman Sachs fraud. He denied the charges and said he would fight them. He did say that he regret sending his girlfriend emails where he bragged about spinning an unsustainable web of risk to investors.
Article Resources
Frank Ahrens at the Washington Post
http://voices.washingtonpost.com/economy-watch/
Marketwatch.com
http://www.marketwatch.com/story/goldman-ceo-abacus-cdo-looks-bad-but-isnt-fraud-2010-04-27
