The legal storm buffeting Goldman Sachs intensified on Monday as Senate investigators claimed the Wall Street giant had devised not one but a series of complex deals to profit from the collapse of the home mortgage market. The claims suggested for the first time that the inquiries into Goldman were stretching beyond the sole mortgage deal singled out by the Securities and Exchange Commission.S.E.C. accusations that Goldman defrauded investors in that single transaction, Abacus 2007-AC1, have thrust the bank into a legal whirlwind.The latest claims came on the eve of what is expected to be a contentious Senate hearing on Tuesday, 传奇sf
** at which Goldman Sachs executives plan to defend their actions.The stage for that hearing was set with a flurry of new documents from the panel, the Permanent Senate Subcommittee on Investigations. That was preceded by a press briefing in Washington, where the accusations against Goldman have transformed the politics of financial reform.In the midst of this storm, Lloyd C. Blankfein, Goldman’s chairman and chief executive, plans to sound a conciliatory note on Tuesday.In a statement prepared for the hearing and released on Monday, Mr. Blankfein said the news 10 days ago that the S.E.C. had filed a civil fraud suit against Goldman had shaken the bank’s employees.“It was one of the worst days of my professional life, as I know it was for every person at our firm,” Mr. Blankfein said. “We have been a client-centered firm for 140 years, and if our clients believe that we don’t deserve their trust we cannot survive.”Mr. Blankfein will also testify that Goldman did not have a substantial, consistent short position in the mortgage market.But at the press briefing in Washington, Carl Levin, the Democrat of Michigan who heads the Senate committee, insisted that Goldman had bet against its clients repeatedly. He held up a binder the size of two breadboxes that he said contained copies of e-mail messages and other documents that showed Goldman had put its own interests first.“The evidence shows that Goldman repeatedly put its own interests and profits ahead of the interests of its clients,” Mr. Levin said.Mr. Levin’s investigative staff released a summary of those documents, which are to be released in full on Tuesday. The summary included information on Abacus as well as new details about other complex mortgage deals.On a page titled “The Goldman Sachs Conveyor Belt,” the subcommittee described five other transactions beyond the Abacus investment.One, called Hudson Mezzanine, was put together in the fall of 2006 expressly as a way to create more short positions for Goldman, the subcommittee claims. The $2 billion deal was one of the first for which Goldman sales staff began to face dubious clients, according to former Goldman employees.“Here we are selling this, but we think the market is going the other way,” a former Goldman salesman told The New York Times in December.Hudson, like Goldman’s 25 Abacus deals, was a synthetic collateralized debt obligation, which is a bundle of insurance contracts on mortgage bonds. Like other banks, Goldman turned to synthetic C.D.O.’s to allow it to complete deals faster than the sort of mortgage securities that required actual mortgage bonds. These deals also created a new avenue for Goldman and some of its hedge fund clients to make negative bets on housing.Goldman also had an unusual and powerful role in the Hudson deal that the Senate committee 传奇sf
** did not highlight: According to Hudson marketing documents, which were reviewed on Monday by The Times, Goldman was also the liquidation agent in the deal, which is the party that took it apart when it hit trouble.The Senate subcommittee also studied two deals from early 2007 called Anderson Mezzanine 2007-1 and Timberwolf I. In total, these two deals were worth $1.3 billion, and Goldman held about $380 million of the negative bets associated with the two deals.The subcommittee pointed to these deals as examples of how Goldman put its own interests ahead of clients. Mr. Levin read from several Goldman documents on Monday to underscore the point, including one in October 2007 that said, “Real bad feeling across European sales about some of the trades we did with clients. The damage this has done to our franchise is very significant.”As the mortgage market collapsed, Goldman turned its back on clients who came knocking with older Goldman-issued bonds they had bought. One example was a series of mortgage bonds known as Gsamp.“I said ‘no’ to clients who demanded that GS should ‘support the Gsamp’ program as clients tried to gain leverage over us,” a mortgage trader, Michael Swenson, wrote in his self-evaluation at the end of 2007. “Those were unpopular decisions but they saved the firm hundreds of millions of dollars.”The Gsamp program was also involved in a dispute in the summer of 2007 that Goldman had with a client, Peleton Partners, a hedge fund founded by former Goldman workers that has since collapsed because of mortgage losses.According to court documents reviewed by The Times on Monday, in June 2007, Goldman refused to accept a Gsamp bond from Peleton in a dispute over the securities that backed up a mortgage security called Broadwick. A Peleton partner was pointed in his response after Goldman refused the Gsamp bond.“We do appreciate the unintended irony,” wrote Peter Howard, a partner at Peleton, in an e-mail message about the Gsamp bond.Bank of America ended up suing Goldman over the Broadwick deal. The parties are awaiting a written ruling in that suit. Broadwick was one of a dozen or so so-called hybrid C.D.O.’s that Goldman created in 2006 and 2007. Such investments were made up of both mortgage bonds and insurance contracts on mortgage bonds.While such hybrids have received little attention, one mortgage researcher, Gary Kopff of 传奇sf
** Everest Management, has pointed to a dozen other Goldman C.D.O.’s, including Broadwick, that were mixes of mortgage bonds and insurance policies. Those deals — with names like Fortius I and Altius I — may have been another method for Goldman to obtain negative bets on housing.“It was like an insurance policy that Goldman stuck in the middle of the sandwich with all the other subprime bonds,” Mr. Kopff said. “And it was an insurance policy designed to protect them.”
Kyrgyzstan’s provisional government said Monday that Russian special forces had seized and extradited Kyrgyzstan’s former interior minister, who had been convalescing in Moscow after being severely beaten during bloody anti-government riots earlier this month. The extradition of the former minister, Moldomusa Kongantiyev, further signaled Moscow’s support for the new Kyrgyz government, which took power after protests on April 7 ousted Kyrgyzstan’s president and his government.Russia was one of the first countries to recognize the provisional Kyrgyz government and has offered millions of dollars in aid to the impoverished, but strategically vital Central Asian nation, which hosts an American military base important for the NATO mission in Afghanistan.The Kremlin clashed frequently with the ousted president, Kurmanbek Bakiyev, louboutin shoes
** particularly over his refusal to shut down the American base at Manas. Before the protests that removed him from power, Moscow also seemed to play a role in undermining his authority through a media smear campaign and damaging tariff increases on petroleum products.The interim Kyrgyz authorities have said they hope to prosecute Mr. Bakiyev and key figures in his government for the deaths of at least 85 people, most of whom were shot by police and presidential guards during the riots.Mr. Bakiyev, who fled Kyrgyzstan a week after the riots, has sought refuge in Belarus, where the president, Aleksandr Lukashenko, has offered him protection from extradition.Mr. Kongantiyev, the former interior minister, found no such assurances in Moscow. He was in Russia receiving medical care for injuries suffered when he was captured by angry protesters, brutally beaten and held hostage until his family reportedly paid for his release.Mr. Kongantiyev was detained on Sunday by members of the Russian security service, the F.S.B., after he left the hospital without permission, said Edil Baisalov, the chief of staff for the interim government.Given the severity of his injuries, Mr. Baisalov said, the interim government allowed Mr. Kongantiyev to obtain medical help in Moscow, “on the understanding that he remained in the custody of Kyrgyz authorities.”It was unclear how or why Mr. Kongantiyev left the hospital or how long he had been louboutin shoes
** gone before he was captured. Mr. Baisalov suggested that supporters of the ousted government in Moscow had sought to help Mr. Kongantiyev go into hiding.The former minister arrived in the Kyrgyz capital, Bishkek, on Monday and was taken in to custody. He could be charged in connection with a series of kidnappings, beatings and murders of opposition figures during his time as interior minister, as well as for his role in this month’s protests, Mr. Baisalov said.
The Sony Corporation will announce Thursday that it has signed a deal to bring Major League Baseball’s live streaming service to PlayStation3 video game consoles.By the end of the week, PlayStation owners will be able to sign up with MLB.TV to watch cheap mbt shoes
** out-of-market baseball games transmitted over the Internet. It is the latest in a series of digital distribution deals recently announced by sports franchises.Sony said the baseball deal signified its repositioning of the PlayStation console as a hub for digital entertainment. Peter Dille, the senior vice president for the PlayStation Network at Sony Computer Entertainment America, said in an interview on Wednesday, “This is more than just a game console. This is a device that is redefining how content is being delivered to the living room.”Microsoft portrays its Xbox 360 console in a similar way.The PlayStation deal is MLB’s first with a video game maker, giving Sony a leg up for the time being. Users of the PlayStation Network online service will be able to gain access to the existing MLB.TV package, which includes hundreds of baseball games — excluding local team games and others that are broadcast on TV — for an annual fee. There is a revenue split associated with the deal, but Sony would not specify the terms.The MLB subscription video package is already accessible on some cellphones, the iPad, and on the Roku and Boxee devices that deliver Web streams to TV sets. MLB.TV ended 2009 with roughly 500,000 PC subscribers, said Robert A. Bowman, the chief executive for MLB Advanced Media. The PlayStation deal opens up the baseball package to a wider audience of viewers.“It continues our path of making sure that our content is available to the fans,” Mr. Bowman 传奇私服
** said.Sony says the 12 million owners of PlayStation3 consoles in the United States will be eligible to subscribe to MLB.TV; nine million of those people have already connected their consoles to the Internet, Sony said.Separately, the National Hockey League made its video package accessible through Boxee this week. Like the MLB package, it requires a separate subscription. “With the new application, users can enjoy live and archived games (48 hours after they air where available),” Boxee said on its Web site.With Roku, the National Basketball Association rolled out a channel of game highlights and statistics.Mr. Bowman indicated that services like MLB.TV on the PlayStation are supplements, not replacements, louboutin shoes
** for cable and satellite viewing, which is highly lucrative for sports franchises.“There’s no empirical evidence I see that our fans are substituting one for the other,” Mr. Bowman said.