To p Goldman Sachs officials defended their conduct in the financial crisis this morning, flatly disputing the government's fraud allegations against the giant financial house. "I did not mislead" investors, insisted a trading executive at the heart of the government's case. But they ran into a wall of bipartisan wrath before a Senate panel investigating Goldman's role in the financial crisis and the Securities and Exchange Commission fraud suit against it and one of its traders. Democratic Sen. Carl Levin of Michigan accused Goldman of making risky financial bets that "became the chips in a giant casino." The hear ing comes as President Barack Obama and Democratic lawmakers are trying to push through a financial regulations overhaul that they hope will win over voters ahead of November congressional elections. The legislation would crack down on the kind of lightly regulated housing market investments that helped set off the crisis. Fabrice Tourre, a 31-year-old trader at Goldman and the only company of f icial direct ly accused in the SEC suit — testified that he does not recall telling investors that a Goldman hedge fund client had bought into an investment that soured. Instead, the hedge fund, Paulson & Co., bet against the security — and profited handsomely. "I deny — categorically — the SEC's allegation," Tourre said. "And I will defend myself in court against this false claim." Federal regulators said Tourre marketed an investment designed to lose value. In a brash January 2007 e-mail, Tourre called himself "The fabulous Fab ... standing in the middle of all these complex ... exotic trades he created." About a half dozen protesters were in the committee room, dressed in prison stripes with names on signs around their necks of Tourre and Goldman CEO Lloyd Blankfein, who was also scheduled to testify. "Fabulous Fab is not so fab when he takes from the poor," the protesters spoke as a chorus before the hearing started. "We want to see these guys behind bars." They hissed at times during the testimony. Ten days after the SEC action, the panel is looking into allegations that Goldman used a strategy that allowed it to profit from the housing meltdown and reap billions at the expense of clients.
Goldman Sachs exec: ‘I did not mislead’
Published: Tuesday, April 27th, 2010
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