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Did Goldman Sachs duped its Investors or is it an scapegoat for Financial Crunch.

After and Huge economic meltdown, the economy was burgeoning, but now Go165px-Goldman_Sachs.svgldsman Sachs Group Inc, a global investment banking and securities firm,  reputed company in wall street is making the news. They are been charged for fraud by US SEC

Securities and Exchange Commission(SEC), the regulatory agency has sued Goldsman Sachs for its involvement in fraud activities. It filed an civil law suit against them.  This can be a huge bump for Goldsman Sachs Group. 

What exactly happened?
A group of Wall street people believe that, there are bunch of
financial products tied with mortgages which are worthless, packaged together and sold to another Goldsman Sachs customer without disclosing the facts.
The main acquisition is that the Goldsman Sachs have misrepresented to their customer about what they were selling to them, so intentionally did not disclosed that the package which they are selling is absolutely worthless and defrauding the customers.
The Goldsman Sachs was working with prominent hedge fund company, Paulson and co inc, largely unregulated investment for wealthy to create a package of subprime mortgages, which were designed to fail. The Paulson and co has earned $3.7Billion in the year 2007 against the subprime mortgages, and the co was no accused of any wrong doing. 
In simple what Goldsman Sachs did is, they pooled up all the subprime mortgages in the US and asked the Paulson and co to list all the worthless mortgages and the Goldman Sachs gave an heading as good investment for the worthless mortgage list and further misrepresented the customer that the hedge fund has already invested in it and never disclosed that the hedge fund has picked these as the worst mortgages.
And due to this the result was that, the investors lost $1 Billion(In which the Hedgefund earned Billion dollar and the Goldsman Sachs has made $15 Million as fees).

What Goldsman Sach has to tell about it? Goldsman Sachs group, Vice president denies the charges and says they are completely in founded of law and fact and they will vigorously contest them.  Further they told that they made an loss of $90 Million on the deal. 

This turns to be an important issue not only for the firm but for the whole financial system.

Why whole financial system?
That's because the chopped up mortgages were sold to the other banks and financial houses, result is the whole system gets infected. 

What US Government says about it?
Government says that they will try to make some profit to the investors, but there I get a doubt, since this case sounds to be unfamiliar, are the SEC trying to make the use of some loopholes and make the Goldsman Sachs a scapegoat for future financial crunch.

Since there were no warnings were given, which is normal in this sort of cases, the same day they raised and charged an case. This made my doubt more stronger.

Experts says that, SEC has difficult chance to win this case, as they stress more on context rather can content. 

Let wait and see how the Goldsman Sachs will defend it.


  1. It is embarrassing that someone with so few of the facts correct puts something like this our there. Others will read this and assume you're telling the truth. Despicable and sad. Do some more research and read a little bit more on what these derivatives actually were and you'll find out that no actual mortgage were directly related to the transaction, just derivatives indirectly tied to the already existing pool of mortgage on the market.

  2. I do not see an fact wrong in the article. This is was said to be happened.


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