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Goldman Sachs, Titan of Wall Street, Faces Fraud Charges From SEC

April 16th, 2010 Comments off

The most powerful investment firm on planet Earth, Goldman Sachs, has been hit with civil charges by the Securities and Exchange Commission, involving allegations of serious fraud. The SEC alleges specifically that Goldman Sachs deliberately withheld information regarding subprime mortgage investments that it sold to clients, involving  hedge fund and client Paulson & Co in selecting the makeup of those securitized investments. As it transpired, Paulson & Co and Goldman Sachs stood to profit in the event these subprime CDO investments tanked, which they did.

Up till now, Goldman Sachs has appeared untouchable. Its vast power is not only tabulated financially; it is a political behemoth in Washington DC and in other power centers across the globe. As the global economy disintegrated with the onset of the worldwide financial crisis, Goldman Sachs took in massive profits. To keep it afloat, the U.S. government infused the corpse of bankrupt insurance giant AIG with taxpayer money, of which nearly $13 billion was funnelled from AIG into the coffers of Goldman Sachs. Incidentally, the taxpayer money paid to Goldman Sachs through AIG almost matches the recent bonuses that Goldman Sachs senior executives decided to pay to themselves.

Lloyd Craig Blankfein, the current CEO of Goldman Sachs, claims his firm “does God’s work.” Perhaps the world will soon discover if fraud, chicanery and defrauding investors forms part of  Blankfein’s definition of divine work.