by Mike Flynn
Last week, the Securities and Exchange Commission brought civil fraud charges against Wall Street investment bank Goldman Sachs. The charges arise from the bank marketing collateralized debt obligations (CDOs) to customers without disclosing that a major hedge fund investor, and Goldman client, John Paulson had made a series of bets against the securities. (The SEC did not announce any charges against Mr. Paulson.)
The announcement of the charges comes at a volatile time for the financial industry. With the Senate set to take up its version of a sweeping revamp of the financial services industry, the allegations against Goldman are certain to have a prominent place in the debate.
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