Bloomberg: Merrill Used Same Alleged Fraud as Goldman, "Tip of Iceberg"
Merrill Used Same Alleged Fraud as Goldman, Bank Says
April 17 (Bloomberg) -- Merrill Lynch & Co. engaged in the same investor fraud that the U.S. Securities and Exchange Commission accused Goldman Sachs Group Inc. of committing, according to a bank that sued the firm in New York last year.
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, known as Rabobank, claims Merrill, now a unit of Bank of America Corp., failed to tell it a key fact in advising on a synthetic collateralized debt obligation. Omitted was Merrill’s relationship with another client betting against the investment, which resulted in a loss of $45 million, Rabobank claims.
Merrill’s handling of the CDO, a security tied to the performance of subprime residential mortgage-backed securities, mirrors Goldman Sachs conduct that the SEC details in the civil complaint the agency filed yesterday. It claimed Goldman omitted the same key fact about a financial product tied to subprime mortgages as the U.S. housing market was starting to falter.
“This is the tip of the iceberg in regard to Goldman Sachs and certain other banks who were stacking the deck against CDO investors,” said Jon Pickhardt, an attorney with Quinn Emanuel Urquhart Oliver & Hedges, who is representing Netherlands-based Rabobank...
Goldman Sachs Said to Have Been Warned of SEC Suit
April 17 (Bloomberg) -- Goldman Sachs Group Inc., which fell 13 percent yesterday after U.S. regulators announced fraud accusations, didn’t disclose that it was warned nine months ago that investigators wanted to bring a case, people with direct knowledge of the talks said.
Goldman Sachs responded to the so-called Wells notice from the Securities and Exchange Commission within months and met with the agency officials trying to fend off the civil lawsuit, said the people, who declined to be identified because the talks weren’t public. In March, the New York-based firm said it was cooperating with regulators’ “requests for information.”...
EU's Investigation of Goldman Will Be 'Profound,' Rehn Says
April 17 (Bloomberg) -- The European Union investigation into Goldman Sachs Group Inc.’s role in providing swaps to the Greek government to help reduce its budget deficit will be “profound and thorough,” EU Monetary Affairs Commissioner Olli Rehn said.
The investigation relates to “our relationship with Goldman Sachs,” Rehn said at a press conference in Madrid today after a meeting of EU finance chiefs and central bankers. “I have asked the Ecofin and Eurostat to conduct a profound and thorough investigation in which the Greek authorities are very well cooperating.”
The U.S. bank arranged the swap deal for Greece in 2002. It helped the government to hide the extent of its budget deficit and overall debt level. Greece’s excessive borrowing subsequently engulfed the country in a debt crisis that Morgan Stanley this week said may lead to the break up of the euro region.
Germany Reviews Legal Action Against Goldman After Fraud Case
April 17 (Bloomberg) -- Germany may take legal action against Goldman Sachs Group Inc. after the U.S. Securities and Exchange Commission said it was suing the company on fraud charges, government spokesman Ulrich Wilhelm said. The German financial regulator, Bafin, “will ask the SEC for information,” Wilhelm, main spokesman for Chancellor Angela Merkel, said today by phone. “Then we will look at the records and consider possible legal steps.”
Goldman was sued yesterday by U.S. regulators for fraud tied to collateralized debt obligations that contributed to the financial crisis. In the complaint, the SEC cited Dusseldorf- based IKB Deutsche Industriebank AG as a purchaser of part of the CDO at issue. In 2008, Germany’s state-owned KfW development bank pumped almost 10 billion euros ($13.5 billion) into IKB to shore up the German banking system...
April 17 (Bloomberg) -- Merrill Lynch & Co. engaged in the same investor fraud that the U.S. Securities and Exchange Commission accused Goldman Sachs Group Inc. of committing, according to a bank that sued the firm in New York last year.
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, known as Rabobank, claims Merrill, now a unit of Bank of America Corp., failed to tell it a key fact in advising on a synthetic collateralized debt obligation. Omitted was Merrill’s relationship with another client betting against the investment, which resulted in a loss of $45 million, Rabobank claims.
Merrill’s handling of the CDO, a security tied to the performance of subprime residential mortgage-backed securities, mirrors Goldman Sachs conduct that the SEC details in the civil complaint the agency filed yesterday. It claimed Goldman omitted the same key fact about a financial product tied to subprime mortgages as the U.S. housing market was starting to falter.
“This is the tip of the iceberg in regard to Goldman Sachs and certain other banks who were stacking the deck against CDO investors,” said Jon Pickhardt, an attorney with Quinn Emanuel Urquhart Oliver & Hedges, who is representing Netherlands-based Rabobank...
Goldman Sachs Said to Have Been Warned of SEC Suit
April 17 (Bloomberg) -- Goldman Sachs Group Inc., which fell 13 percent yesterday after U.S. regulators announced fraud accusations, didn’t disclose that it was warned nine months ago that investigators wanted to bring a case, people with direct knowledge of the talks said.
Goldman Sachs responded to the so-called Wells notice from the Securities and Exchange Commission within months and met with the agency officials trying to fend off the civil lawsuit, said the people, who declined to be identified because the talks weren’t public. In March, the New York-based firm said it was cooperating with regulators’ “requests for information.”...
EU's Investigation of Goldman Will Be 'Profound,' Rehn Says
April 17 (Bloomberg) -- The European Union investigation into Goldman Sachs Group Inc.’s role in providing swaps to the Greek government to help reduce its budget deficit will be “profound and thorough,” EU Monetary Affairs Commissioner Olli Rehn said.
The investigation relates to “our relationship with Goldman Sachs,” Rehn said at a press conference in Madrid today after a meeting of EU finance chiefs and central bankers. “I have asked the Ecofin and Eurostat to conduct a profound and thorough investigation in which the Greek authorities are very well cooperating.”
The U.S. bank arranged the swap deal for Greece in 2002. It helped the government to hide the extent of its budget deficit and overall debt level. Greece’s excessive borrowing subsequently engulfed the country in a debt crisis that Morgan Stanley this week said may lead to the break up of the euro region.
Germany Reviews Legal Action Against Goldman After Fraud Case
April 17 (Bloomberg) -- Germany may take legal action against Goldman Sachs Group Inc. after the U.S. Securities and Exchange Commission said it was suing the company on fraud charges, government spokesman Ulrich Wilhelm said. The German financial regulator, Bafin, “will ask the SEC for information,” Wilhelm, main spokesman for Chancellor Angela Merkel, said today by phone. “Then we will look at the records and consider possible legal steps.”
Goldman was sued yesterday by U.S. regulators for fraud tied to collateralized debt obligations that contributed to the financial crisis. In the complaint, the SEC cited Dusseldorf- based IKB Deutsche Industriebank AG as a purchaser of part of the CDO at issue. In 2008, Germany’s state-owned KfW development bank pumped almost 10 billion euros ($13.5 billion) into IKB to shore up the German banking system...