Goldman Sachs Screwed Clients as Bubble Burst

Senate panel will scold execs, reveal evidence in hearing today
By Kevin Spak,  Newser Staff
Posted Apr 27, 2010 7:04 AM CDT
Updated Apr 27, 2010 7:43 AM CDT
Goldman Sachs Screwed Clients as Bubble Burst
Goldman Sachs CEO Lloyd Blankfein attends President Barack Obama's speech in New York's Cooper Union college, in this April 22, 2010 file photo.   (AP Photo/Richard Drew, File)

Goldman Sachs sold investors a mountain of securitized subprime mortgages throughout the housing boom, but when things started to turn sour, they bet against those assets furiously—sometimes while still selling them, according to documents the Senate Permanent Investigations Subcommittee intends to browbeat the company with today. “They have a lot to answer for,” says Chairman Carl Levin. But Goldman insists that it always put clients first, the Huffington Post reports.

“If our clients believe that we don’t deserve their trust, we cannot survive,” CEO Lloyd Blankfein will say according to his prepared testimony. But the committee's accusations go beyond the SEC's, the New York Times explains. It details, for example, at least one product Goldman created with the specific intention of betting against it as soon as it was sold. (More Goldman Sachs stories.)

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