Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
City trader linked to Goldman Sachs case as regulators track sub-prime deals | Business | The Observer

The Financial Services Authority is closely monitoring developments at Goldman Sachs after one of its London-based traders was implicated by US authorities in a $1bn fraud case that hit Royal Bank of Scotland.

The link gives a domestic dimension to the lawsuit filed by the US Securities and Exchange Commission against Goldman Sachs. The case is the biggest sign yet that regulators on both sides of the Atlantic intend to pursue the architects of the exotic financial instruments that helped to cause the credit crunch. It is alleged that the American bank defrauded investors by encouraging firms to take bets on sub-prime mortgages it knew would turn sour.

The Liberal Democrat Treasury spokesman, Lord Oakeshott, said if the claims proved true it would demonstrate "the extent greedy bankers would go to, to pull the wool over the eyes of their customers and the regulator".

The accusations are levelled at Goldman Sachs, as well as French employee Fabrice Tourre, 31, who is now an executive director in its London office.

The US financial watchdog obtained emails sent to a friend in which Tourre jokes: "The whole building is about to collapse... only potential survivor, the fabulous Fab [Fabrice Tourre]... standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!"

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Sun Apr 18th, 2010 at 11:55:12 AM EST
[ Parent ]

Others have rated this comment as follows:


Occasional Series