SEC examining Goldman Sachs' Hudson deals: report
A Goldman Sachs sign is seen at the New York Stock Exchange April 21, 2010.
Credit: Reuters/Brendan McDermid
NEW YORK |
NEW YORK (Reuters) - The U.S. Securities and Exchange Commission, which charged Goldman Sachs Group Inc with fraud in April, is investigating another mortgage-linked deal once pitched by the Wall Street firm, the Financial Times reported, citing people close to the matter.
The SEC has been gathering information about Hudson Mezzanine Funding, a $2 billion collateralized debt obligation, but the probe was preliminary and there was no certainty it would lead to additional charges against Goldman, The Financial Times reported.
Goldman declined to comment on the report.
In April, U.S. securities regulators charged the powerful Wall Street bank with civil fraud in connection with the structuring and sale of another CDO called Abacus 2007.
The Financial Times said the Hudson probe is part of a wider investigation into CDO securities dealing on Wall Street.
On Wednesday, an Australian hedge fund sued Goldman over its investment in the Timberwolf CDO, claiming the subprime mortgage-linked security contributed to the fund's demise in 2007.
(Reporting by Steve Eder, editing by Maureen Bavdek)
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
Using home prices forecast it is hard to believe that the financial institutions and credit rating agencies involved in the CDO business had sophisticated risk analysis simulations, but did not forecast price movements of the underlying collateral.
CDOs played a notable role in the financial markets. The constructors of the CDOs may not bear direct responsibility. Rather their reckless use, misunderstanding and ignorance of key warning signs likely contributed to the magnitude of the financial crisis. You can observe the financial landscape today and recognize from the survivors, walking wounded and the absentees those who knew and those who had not understood the use of these tools.
See article that appeared in http://thewallstreetchallenger.com/Index/Did_CDO_caused_FC.htm
Follow Reuters