Goldman Sachs secretly creates a new committee

Goldman Sachs is alive

In brief: Goldman Sachs is trying to survive, but it's very hard.

Goldman Sachs created a committee on business standards. As the head of the U.S. bank investors Lloyd Blankfeyn, the new structure will explore products and services of the bank. This announcement came after last week’s U.S. Commission on Securities and Exchange Commission (SEC) to the bank were charged with cheating the shareholders. Moreover, the criminal investigation was launched by the Ministry of Justice. “We need a thorough internal audit” – appealed to investors AL Blankfeyn.

May 4 shareholders made several claims against Goldman Sachs, accusing him of mismanagement of risk during the preparation and sale of complex derivative instruments, secured by mortgage securities, and demanded compensation. The dissatisfaction of shareholders due to the fact that since the beginning of the investigation of the charges earlier charges quotations Goldman Sachs fell more than 20%.

Recall that on April 16 this year SEC filed a lawsuit against U.S. bank Goldman Sachs, accusing him of securities fraud. The focus knob was a derivative called Abacus 2007-AC1. Eight months after the sale of Abacus to investors that asset has depreciated almost completely – 99% of papers that were part of the mortgage pool, are faced with the downgrade. Investors lost on investments in Abacus about 1 billion dollars later the international rating agency Fitch Ratings revised its outlook on long-term and short-term ratings of Goldman Sachs from “stable” to “negative”. Now ratings are at a level A + / F1 +.

Pavel Migin
2010-05-07 18:24, Economics.

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