Excerpt from Senate Probe: Goldman Planned To Profit From Bust:
Goldman is fighting back. At the hearing, Blankfein will repeat the company’s argument that it lost $1.2 billion in the residential mortgage market during 2007 and 2008. He also will argue that Goldman wasn’t making an aggressive negative bet — or short — on the mortgage market’s meltdown.
“We didn’t have a massive short against the housing market, and we certainly did not bet against our clients,” Blankfein says in prepared remarks released by the company. “Rather, we believe that we managed our risk as our shareholders and our regulators would expect.”
The SEC has alleged that Goldman concocted mortgage investments without telling buyers that the investments had been put together with help from a hedge fund that was betting on them to fail.
Goldman disputes the charges.
At the hearing, Blankfein will will also argue that Goldman wasn’t making an aggressive negative bet — or short — on the mortgage market’s meltdown.
“We didn’t have a massive short against the housing market, and we certainly did not bet against our clients,” Blankfein says in the prepared remarks released by Goldman. “Rather, we believe that we managed our risk as our shareholders and our regulators would expect.”