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SEC Charges Goldman Sachs in CDO Fraud

By Mark H. Astarita, Esq.

In a complaint filed in the Southern District of New York, the SEC has filed civil charges against Goldman Sachs, alleging that it structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). The Commission alleges that Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO. The SEC Press Release contains more details and a copy of the complaint.Investors who invested in the CDO, ABACUS 2007-AC1, can contact our office by phone at 973-559-5566 or by email, for more information.continue to full post

Full post as published by SECLaw.com on April 16, 2010 (boomark / email).