Wednesday, April 21, 2010

Goldman [Money] Sachs earns revenues at a rate of $1 million every ten minutes

Paulson & Co paid Goldman $15m to set up Abacus and played a key role in putting together the portfolio of mortgage-related securities that went into the vehicle, before betting against it. The SEC says Goldman failed to mention this when it was marketing Abacus. Paulson went on to make $1bn from its negative bet.

SHOOT: Goldman sets up a company [to fail]. Encourages investors to invest in this set up, then makes their own money betting against their own company set up failing. Charming.

The Securities and Exchange Commission's civil charges came after the end of a financial quarter in which Goldman was once again the king of Wall Street, but threaten to do major damage to its reputation.

The bank earned a record $3.46bn (£2.25bn) in the first three months of the year, and was bringing in revenues at the rate of $1m every 10 minutes. It has begun to accumulate reserves to pay its bumper year-end bonuses, and set aside $5.49bn for pay and benefits, representing $166,000 per employee by the end of March.

Mr Tourre is personally accused of fraud, and of misleading Abacus investors by telling them that Paulson was going to be an investor, too – something Goldman denies he said.

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