SEC Rule Would Ban Banks and Hedge Funds From Betting on Investor Losses
SEC Rule Would Ban Banks and Hedge Funds From Betting on Investor Losses
By DJ Pangburn Monday, September 19, 2011
In the lead-up to the 2008 sub-prime mortgage crisis, banks like Goldman Sachs bet against their clients with collateralized debt obligations and were rewarded handsomely. A new Securities and Exchange Commission (SEC) proposal would make this illegal.
In 2007, as the sub-prime mortage crisis was looming, Goldman Sachs and hedge funder manager John Paulson teamed up to bundle 3,000,000 sub-prime mortgage loans together into a collateralized debt obligation called ABACUS 2007-AC1, and then shorted mortgages to unwitting investors. John Paulson made $1 billion (Goldman took a $15 million cut) and investors lost $1 billion.
According to The New York Times, 25 such investment vehicles were created by Goldman Sachs in order to shield the firm from massive losses in mortgages. However, they turned out to be rather great investments instead of losses. (Deutsche Bank and Morgan Stanley also created these CDOs).
At issue in the SEC complaint was whether the firms who selected the mortgages intentionally chose those most likely to fail and shine the shit for their investors.
.
Comment
"Destroying the New World Order"
THANK YOU FOR SUPPORTING THE SITE!
Latest Activity
- Top News
- Everything
Stink full movie
documentary on dangerous chemical ingredients found in everyday products
Revolution (1968) scenes featuring Today Louise Malone
Some clips from Jack O'Connell's Revolution (1968), featuring the one and only Today Louise Malone.
"This screenshot is from a book found by a blogger in his research and gives an eye witnessed…"
The Hunt - Official Trailer [HD]
"A former ANTIFA member was interviewed here recently and this would not be far from actual reality…"
Legacy of Supposedly Inferior Aircraft Outmatching Their Enemies
We think of the Korean War aerial combat as the classic dogfights between the American F-86 Sabre…See More
"This is just another form of a feudal globalism dictated by corporate technocrats bragging about…"
What is Area 2 and What Goes on There?
We have all heard of Area 51 and S-4, along with such terms as Water Town, Papoose Lake,…See More
STRANGE THINGS HAPPENING IN YELLOWSTONE
It’s not the fact that Yellowstone National Park sits atop a super volcano that hasn’t erupted in…See More
Austrian police raid house of man who leaked Israeli ambassador video making genocidal comments
In a new ITV documentary, Breaking Ranks: Inside Israel’s War, former Israeli soldiers describe how Gaza civilians were killed, often without warning, in an ...
WARHAMMER 40,000 | 1980's GRIMDARK MOVIE
WARHAMMER 40,000 | 1980's GRIMDARK MOVIEThis is a Concept Movie Trailer made with the help of AI. This video is created purely for fun and out of curiosity a...
© 2025 Created by truth.
Powered by
You need to be a member of 12160 Social Network to add comments!
Join 12160 Social Network