{"id":5147,"date":"2011-04-15T00:00:00","date_gmt":"2011-04-15T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/04\/goldman_sachs_group_made_money_1"},"modified":"2022-04-04T13:20:09","modified_gmt":"2022-04-04T18:20:09","slug":"goldman-sachs-group-made-money-1","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/goldman-sachs-group-made-money-1\/","title":{"rendered":"Goldman Sachs Group Made Money From Financial Crisis When it Bet Against the Subprime Mortgage Market, Says US Senate Panel"},"content":{"rendered":"

The Senate’s Permanent Subcommittee on Investigations says that because Goldman Sachs Group Inc. bet billions against the subprime mortgage market it profited from the financial crisis. The panel\u2019s findings come following a two-year bipartisan probe and were released in a 639-page report on Wednesday. <\/p>\n

The subcommittee released documents and emails that show executives and traders attempting to get rid of their subprime mortgage exposure, which was worth billions of dollars, and short the market for profit. Their actions ended up costing their clients that purchased the financial firm\u2019s mortgage-related securities.<\/p>\n

The panel says that Goldman allegedly deceived the investors when failing to tell them that the investment bank was simultaneously shorting or betting against the same investments. The subcommittee estimates that Goldman\u2019s bets against the mortgage markets in 2007 did more than balance out the financial firm\u2019s mortgage losses, causing it to garner a $1.2 billion profit that year in the mortgage department alone. Also, when Goldman executives, including Chief Executive Lloyd Blankfein appeared before the committee in 2010, the panel says that they allegedly misled panel members when they denied that the financial firm took an a position referred to as being \u201cnet short,\u201d which involves heavily tilting one\u2019s investments against the housing market. <\/p>\n

It was just last year that the Securities and Exchange Commission ordered Goldman to pay $550 million to settle securities fraud <\/a>charges over its actions related to the mortgage-securities market. The allegations in this report go beyond the claims covered by the SEC case. The report also names mortgage lender Washington Mutual, credit rating firms, the Office of Thrift Supervision, and a federal bank regulator as among those that contributed to the financial crisis. <\/p>\n

Goldman is denying many of the subcommittee\u2019s claims and says its executives did not mislead Congress. <\/p>\n

Related Web Resources: <\/strong>
\nGoldman Sachs shares drop on Senate report<\/a>, Reuters, April 14, 2011<\/p>\n

Senate Panel: ‘Goldman Sachs Profited From Financial Crisis’<\/a>, Los Angeles Times, April 14, 2011<\/p>\n

Senate Permanent Subcommittee on Investigations<\/a><\/p>\n<\/p>\n

More Blog Posts: <\/strong>
\nGoldman Sachs Sued by ACA Financial Guaranty Over Failed Abacus Investment for $120M, Institutional Investor Securities Blog, January 10, 2011<\/p>\n

Goldman Sachs Settles SEC Subprime Mortgage-CDO Related Charges for $550 Million<\/a>, Stockbroker Fraud Blog, July 30, 2010<\/p>\n

Goldman Sachs COO Says Investment Firm Shorted 1% of CDOs Mortgage Bonds But Didn\u2019t Bet Against Clients<\/a>, Stockbroker Fraud Blog, July 14, 2010<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Senate’s Permanent Subcommittee on Investigations says that because Goldman Sachs Group Inc. bet billions against the subprime mortgage market it profited from the financial crisis. The panel\u2019s findings come following a two-year bipartisan probe and were released in a 639-page report on Wednesday. The subcommittee released documents and emails that show executives and traders […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3947,3757,3741],"tags":[],"class_list":["post-5147","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-goldman-sachs","category-mortgagebacked-securities","category-securities-fraud"],"yoast_head":"\nGoldman Sachs Group Made Money From Financial Crisis When it Bet Against the Subprime Mortgage Market, Says US Senate Panel — Investor Lawyers Blog — April 15, 2011<\/title>\n<meta name=\"description\" content=\"The Senate's Permanent Subcommittee on Investigations says that because Goldman Sachs Group Inc. bet billions against the subprime mortgage market it — April 15, 2011\" \/>\n<meta name=\"robots\" content=\"index, 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