Thu, Dec 8, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds rally around Goldman Sachs, dismiss SEC case as ‘childish’ and all drama

Wednesday, April 28, 2010
Opalesque Industry Update – Embattled global investment bank Goldman Sachs found an ally in big names from the hedge funds industry, who described the U.S. Securities and Exchange Commission (SEC) charges against it as “childish” and all drama.

Activist hedge fund Ken Griffin of Citadel Investment Group said that the questioned disclosure around Goldman’s transaction with John Paulson, CEO of hedge fund firm Paulson & Co., that is being used to vilify the investment bank or to pass regulatory reform is incredible. “I don’t want to use the word childish… but it’s childish,” he told Reuters.

Bill Ackman, founder and CEO of Pershing Square Capital Management, defended Goldman Sachs and told CNBC that he does not believe the bank had committed fraud. “I don’t think the (Securities and Exchange Commission) has a good case. Having been the subject of investigation in the past … I don’t feel sorry for Goldman Sachs, but they’re not being treated fairly,” he said.He explained that it would be unethical for Goldman to disclose that Paulson was shorting the housing trade to any investors taking long positions.

The SEC filed securities charges against Goldman Sachs and one of its employees, Fabrice Tourre, for alleged material misstatements and omissions in connection with a synthetic collateralized debt obligations (CDO) that the bank structured and marketed. The synthetic CDO called ABACUS 2007-ACI, was shorted by John Paulson – a transaction that saw him earn around $1bn.

An unnamed senior London-based hedge funder told Fox Business that hedge funds are sticking with Goldman Sachs because nobody wants “to kill the golden goose.” The source told Fox Business, "People are not afraid to move the business to where they think it should be, regardless of who the counterparty is. But obviously nobody wants to upset Goldman ... at the moment they don't have any reason."

On Sunday, Berkshire Hathaway’s CEO Warren Buffet expressed confidence with his $5bn investment into Goldman Sachs. Berkshire’s director Thomas Murphy said Buffet is not concerned with his investment and remains comfortable with his working relationship with the investment bank.

Goldman Sachs’ CEO Lloyd Blankfein pledged to introduce reforms in the bank’s policies in the wake of its recent controversy. He made the promise during the nearly 11-hour hearing conducted on Tuesday by the U.S. Senate Permanent Subcommittee on Investigations, led by Senator Carl Levin. He told senators that "everything that's been the subject of criticism will be tightened up.”

At the same time, a senior lawyer representing Goldman Sachs said the judgment should be based on “merits and facts” rather than on a picture of Goldman as an “evil empire.”
-Komfie Manalo

Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Institutions - Texas County & District culls 5 hedge funds, reallocates to existing managers, Kentucky board gives final approval to halve hedge fund portfolio, $38bn Finnish fund moves assets to U.S. as Europe flounders, South Korea’s National Pension Fund holds 5% stake in 62 listed companies[more]

    Texas County & District culls 5 hedge funds, reallocates to existing managers Texas County & District Retirement System, Austin, continues to reduce the number of hedge funds, but not the size of its $6.2 billion hedge fund portfolio. It will redeem a total of $760 million from five hedg

  2. Opalesque Roundtable: Australian family offices search for good risk adjusted returns, happy to pay for skill[more]

    Komfie Manalo, Opalesque Asia: Australian family offices want foremost good risk adjusted returns, and they are happy to pay for the skill, and in some cases, the limited capacity of an active manager. Jonas Daly, Head of Distribution at B

  3. StepStone announces close of Swiss Capital acquisition[more]

    StepStone Group LP announced it has successfully closed the acquisition of Swiss Capital Alternative Investments AG, one of the leading private debt and hedge fund solutions providers in Europe. The transaction was originally announced in May 2016, and has been in the process of receiving regulatory

  4. Investing - Stephen Cohen investing $275m in free clinics treating veterans' mental health issues, California Resources loses favor with hedge funds[more]

    Stephen Cohen investing $275m in free clinics treating veterans' mental health issues From Healthcarefinancenews.com: …Now, a new chain of free mental health clinics for vets has opened in five cities across the United States to fill the gap. The much-needed new treatment is underwritten

  5. Hedge funds flat in last week of November 'in sympathy with markets’[more]

    Komfie Manalo, Opalesque Asia: Hedge funds were close to flat in the last week of November in sympathy with markets, which took a pause ahead of the OPEC meeting and Italian referendum. The Lyxor Hedge Fund Index was -0.1% as of end November 29 (-1.7% YTD), according to the latest