Goldman Sachs Sued by SEC

By IBTimes Staff Reporter | April 16 2010 11:38 AM

Goldman Sachs Group Inc (NYSE: GS) was sued Friday by the Security and Exchange Commission (SEC) for Fraud tied to packaging and selling collateralized debt obligations that helped deepen the worst financial crisis in decades. The company omitted some key factors about financial products tied to subprime mortgages as the U.S housing market started to fall, as stated by the SEC where it also filed a suit in court against Fabrice Tourre, who's serving as Goldman Sachs Vice President.

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SEC stated that, the company failed to report to investors that the marketed CDOS that hinged on the performance of the subprime mortgages, was being bet against by hedge fund Paulson & Co. while adding that Paulson wasn't accused of wrongdoing.

As of 11:00 EST, GS share dropped more than 11.0 percent to trade at $163.91 per share.