Summary Box: Government accuses Goldman Sachs of fraud in subprime mortgage investments
By APFriday, April 16, 2010
Summary Box: Goldman Sachs accused of fraud
WALL STREET POWERHOUSE ACCUSED OF FRAUD: The government says Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail. Goldman denies the civil fraud allegations.
HOUSING BUST FALLOUT: The investors lost nearly $1 billion while the favored client — hedge fund Paulson & Co. — was able to capitalize on the housing market bust in 2007, the Securities and Exchange Commission says in a lawsuit.
MARKET ANXIETY: The prospect of possible legal jeopardy for other big financial players in the aftermath of the crisis roiled the stock market Friday. Goldman shares dropped more than 12 percent. The Dow Jones industrial average finished down more than 125 points.
