Goldman Sachs, its image tarnished by a new subprime-related legal action brought by the government, on Monday made additional comments on the case, including a revelation that it too lost money on the CDO transaction in question. Goldman now claims the firm lost more than $90 million on the deal, which is still paltry compared to almost $1 billion in estimated losses suffered by investors. In answering allegations levied by the Securities and Exchange Commission, the Wall Street firm says it made "extensive" disclosures to investors IKB, a large German Bank, and ACA Capital Management, which it called "sophisticated CDO market" participants. Goldman says the "risk associated with the securities was known to these investors." On Friday the SEC accused Goldman and an executive involved in the transaction of misleading clients on a subprime bond known as ABACUS 2007-AC1. Goldman marketed the offering in 2007. The SEC accused the firm of civil fraud, saying it created the CDO with the help of a hedge fund that was shorting the same bond but did not disclose the relationship to investors.
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In its latest financial stability report, the Federal Reserve found that asset prices continue to exceed underlying fundamentals and leverage levels remain high, especially by hedge funds.
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The Long Island-based regional bank, which reported another quarterly loss Friday, continues to hire in the commercial-and-industrial lending sphere as it seeks to diversify its commercial real estate-heavy business.
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The lender's parent also said it is actively in preparation to move forward on plans to unlock equity value in 2025, with a Newrez spinoff among its options.
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Doug Duncan may be retired from Fannie Mae, but not from the housing market—his new firm is ramping up with writing, speaking, and advisory work.
April 25 -
The way mortgage firms address distressed military borrowers will become less regimented as the Veterans Affairs Servicing Purchase program gets phased out.
April 25 -
The trend is not the norm but there are growing opportunities to buy for less in some areas many people gravitate to, real-estate brokerage Redfin found.
April 24