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U.S. markets recover from steep losses
NEW YORK, April 19 (UPI) -- Top level Goldman Sachs executives were heavily involved with the mortgage unit accused of selling doomed-to-fail securities, sources told The New York Times.
The Securities and Exchange Commission filed suit Friday, charging the investment bank with selling securities secretly selected by John Paulson, a hedge fund manager who was betting against the housing market and earned $1 billion when the Goldman securities failed.
In December 2006, the bank's top management decided in a meeting the housing market was going to fail and the bank began to reduce its holdings in mortgage-backed securities, the Times said.
The meeting included Chief Financial Officer David Viniar and bank President Gary Cohn. After that sources said top executives, including Chairman and Chief Executive Officer Lloyd Blankfein, were often found at the mortgage unit's offices.
"They basically said, "What does this department do? Tell us everything about mortgages," one source said.
The only Goldman executive named in the lawsuit is Fabrice Tourre, who was one of the first at the bank to conclude the housing market was poised for a collapse, the Times said.
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