Once again, I’m shocked!

Not too long ago the SEC announced that it was pursuing an investigation against Goldman Sachs for fraud with regards to some funds they sold to their customers. The original story alleged that GS had created a fund that was designed to lose money, because they had a big customer who wanted to create a sure money-loser made up largely of “toxic waste” mortgages; the fraud was said to have taken place when GS turned around and sold parts of that fund to ordinary investors as a normal, hopefully-money-gaining investment.

Well, yesterday it was announced that Goldman Sachs reached a settlement with the SEC over the matter. They are to pay the Feds $550M — over half a billion dollars — to settle it. There was no admission of any guilt or responsibility of course so it would be wrong to imply either. That being said, it certainly goes to show how little one should trust investment bankers, unless one is a member of that particular job club. As those who like to follow these sorts of things in the news know, bankers are not your friends. They make a living based on what they can sell you, not based on your returns. The rest of the world lost its shirt in 2008 because of those guys, but did they miss out on their bonuses? Not a bit.

Click on a tab to select how you'd like to leave your comment

Leave a Reply

Your email address will not be published. Required fields are marked *