Showing posts with label ABC NEWS. Show all posts
Showing posts with label ABC NEWS. Show all posts

ABC NEWS : IMF Trims Estimate of Losses From Financial Crisis. April 20th 2010

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ABC. Goldman Sachs CEO LLoyd Blankfein tried to rallied his troops over the weekend... April 19th , 2010


Goldman Sachs CEO Lloyd Blankfein tried to rally his troops over the weekend following the Securities and Exchange Commission's investor fraud charges, leaving his staff two voice mails.

Wall Street powerhouse charged with selling securities designed to fail.
In one message left Sunday night, Blankfein said, "The extensive media coverage on the SEC's complaint is certainly uncomfortable, but given the anger directed at financial services, not completely surprising."
The purpose of the voice mails, Goldman officials told ABC News, was to inform employees about the firm's reaction to the charges and to keep them focused on the task at hand: servicing Goldman's clients. But officials are also trying to boost morale at a crucial time for the bank.
While the fallout continues from the SEC charges, the bank announces first-quarter earnings Tuesday, and Blankfein is set to testify before a Senate panel on April 27.
Federal regulators Friday charged investment bank Goldman Sachs with fraud over the sale of risky subprime mortgage securities that were secretly designed to fail, costing investors $1 billion.
In a civil suit, the SEC alleged that Goldman Sachs didn't tell investors that a massive hedge fund -- Paulson & Co. -- had handpicked the subprime mortgages that went into the securities in question, all with an eye toward picking those most likely to go bust. The securities were then bundled up and sold to investors, who were told the mortgages had been picked by an independent third party.
Goldman issued a lengthy statement on its Web site, asserting that its losing $90 million on the deal proves it did not design a ticking time bomb. But it flat out denied a key point, that Goldman misled ACA Management, the money manager it assigned to the deal. The SEC said Goldman, in arranging for Paulson to assist ACA in selecting the mortgages that went into the deal, told ACA that Paulson would be a long investor, when his intent was to short the deal, in effect betting against it. Goldman said it never told ACA that Paulson would be a long investor.
"Goldman Sachs has never condoned and would never condone inappropriate activity by any of our people," Blankfein said in one of the voice mails to staff. "We have faced challenges before, and our people have always responded through their skills, talent and focus on our clients. We will do that now, and in the process, reaffirm everything that defines Goldman Sachs."

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