Executives deny Goldman Sachs fraud

Goldman Sachs CEO Lloyd Blankfein is sworn in prior to testifying before a Senate investigative committee on Capitol Hill -- April 27, 2010.


Stacey Vanek-Smith: One bullish spot in all that bearish news, ironically enough, Goldman Sachs. The investment bank added two-thirds of a percent yesterday. That despite the fact most of its executives spent the day on Capitol hill getting grilled by lawmakers on accusations of fraud. Nancy Marshall Genzer has that story.

Nancy Marshall Genzer: The Goldman Sachs executives answered questions from the Senate Permanent Subcommittee on Investigations for almost 11 hours. The panel's chairman, Democrat Carl Levin of Michigan, asked again and again if the executives thought they did anything wrong. Again and again, the bankers said no. Goldman is accused of betting against its clients, selling them investments it knew were shaky.

Carl Levin: You were making a lot of money betting against securities that you were selling to customers. That is, I think, intolerable. There's a fundamental conflict of interest.

Goldman CEO Lloyd Blankfein told the subcommittee that clients who bought risky investments from Goldman were sophisticated enough to know exactly what they were doing. He says they were looking for risk and "that's what they got."

This wasn't a trial, but legal questions about Goldman's conduct will continue in court. The Securities and Exchange Commission has sued the investment bank, saying it defrauded investors.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.
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"[Goldman CEO Lloyd Blankfein] says they were looking for risk and "that's what they got."

Yeah... in other words, they were looking to get screwed and that's what they got?

If so, they did.
Somehow, however, I doubt it.

In prostitution, clients know their risk. And yet it is a criminal offense. It does not affect the public directly; but it has proven to be disastrous for the community. What Goldman is indulging in is very similar, it claims that the clients know what they are doing. But it is a criminal offense because it destroys communities. Goldman is very arrogant, its all about making money by hook or by crook, as long they can subvert justice. Synthetic CDOs were created so that Goldman can win; others will loose; otherwise Goldman wouldn't create it. This is a ZERO SUM game, you loose, I win. It was created so that somebody looses. Alas, it is the middle income families that got duped and lost. If this isn't a crime, what is? I am surprised that CNBC, Kudlow and company lobby for Goldman, and ruin the airwaves.

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