felt that in these meetings, Goldman “deliberately misled the company to believe that Paulson & Company was also investing in Abacus” when in actuality, Paulson & Company was making the “opposite investment wager, with the expectation that Abacus would lose money” (ibid). Meanwhile, another investment client, ACA Management LLC (ACA) met with Goldman traders to discuss potential mortgage investments. The security in question, Abacus 2007-ACI (Abacus), had been created for John Paulson, the manager of the hedge fund Paulson & Company, and one of Goldman’s institutional clients (ibid).
On April 16, 2010, the Securities and Exchange Commission (S.E.C.) filed a civil suit against the mega-firm, accusing the company of committing securities fraud, in which the bank created and sold a mortgage investment “that was secretly devised to fail” (Schrieber 2011). The company was the first Wall Street company to pay back its bailout money in 2009, but came under the radar again as its “hardball tactics and super-sized profits drew new scrutiny and criticism” (ibid). It was able to survive the meltdown by turning into a commercial bank holding company and took on federal assistance (Story 2009). When the financial markets crashed in 2008, Goldman did not come away unscathed. commercial paper-dealer” to a “global juggernaut, serially transforming itself from agent to managing agent to managing partner to principal investor with such strengths that it operates with almost no external constraints in virtually any financial market it chooses…” (Ellis 2008). In Charles Ellis’s disquisition of Goldman’s rise to the top, The Partnership, he remarks that in the last sixty years, Goldman has gone from being a “marginal Eastern U.S. Goldman Sachs is one of the most profitable and powerful investment banks in the world today.
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