Regulatory Framework For The Pension Funds

Regulatory Framework For The Pension Funds

Regulatory Framework For The Pension Funds

The SEC complaint filed on April 16, 2010 in the U.S. District Court, Southern District of New York against Goldman Sachs and its vice president Fabrice Tourre alleges securities fraud in marketing and structuring of a CDO financial instrument called ABACUS 2007-AC1 (ABACUS) in February 2007. ABACUS was sold to Goldman Sachs clients as a "synthetic collateralized debt obligation (CDO) that hinged on the performance of sub-prime residential mortgage-backed securities (RMBS)," states the SEC press release regarding the filing of the civil fraud complaint.

Goldman Sachs Civil Fraud Allegations

Robert Khuzami, Director of the SEC's Division of Enforcement, public statement provided that "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party."