Goldman CEO: SEC Fraud Suit Will ‘Hurt America’
April 22, 2010
(ChattahBox)—Well, this is amusing. The beleaguered CEO of Goldman Sachs, sued by the SEC for civil fraud, made a slew of phone calls to shaky clients, hoping to persuade them not to withdraw their cash from Goldman investments. And some of the smack reportedly thrown around by chief executive Lloyd Blankfein, sounds paranoid and well, bizarre. Blankfein told multiple investors, that the SEC lawsuit will “hurt America” and that the government is out to kill Goldman Sachs.
According to the report by the Financial Times, Blankfein portrayed the SEC suit as a politically motivated witch hunt that has no legal merit:
“One person who received a call from the Goldman chief said he was told the regulator’s case against the bank was politically motivated and would ultimately “hurt America.”’ [...]
‘“He was very aggressive,” said one person called by Mr Blankfein on Wednesday. “He feels that the government is out to kill them, that they are under attack and the whole thing is totally political.”’
The SEC sued Goldman for its practice of repackaging exotic mortgage instruments designed to fail and sold to unwitting investors, not realizing Goldman bet against the performance of the instruments, raking in a profit, while investors lost money.
“The most profitable company in Wall Street history, created and sold collateralized debt obligations tied to subprime mortgages in 2007 without disclosing that hedge fund Paulson & Co. helped pick underlying securities and bet against the vehicles, the SEC said in its suit.”
Blankfein and a Goldman employee named in the SEC lawsuit, Fabrice Tourre, are scheduled to appear before a Senate panel next week.