accuses Goldman of intentionally designing a financial product that would have a high chance of falling in value, at the request of a client, and lying about it to the customers who bought it. It says that Goldman allowed that client — John Paulson, a hedge fund manager — to pick bonds he wanted to bet against, and then packaged those bonds into a new investment.
Goldman then sold this investment to its clients, telling them the bonds were chosen by an independent manager, and omitted that Mr. Paulson was on the other side of the trade, shorting it, in the industry vernacular.
Five months after Goldman sold the investments, 83 percent of the bonds contained in the packaged securities were downgraded by rating agencies.
via nytimes.comO me oh my.
And you know that they wouldn't be prosecuting if they didn't have solid proof. This is also why I stay the hell away from the stock market. I trust these white guys in suits about as far as I can throw them. As far as I'm concerned most of them want to grow up to be Lex Luthor (the post-1987 one with the crazy shrewd business acumen, not the original crazy scientist guy). Too bad no one aspires to be Superman or even Batman these days.
I'm tempted to suggest that this is what happens when the closest thing we have to a national hero is Homer Simpson.
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