Does loyalty lie with the lawyer or the law firm?
Big changes were afoot in the London hedge fund legal scene last week, after New York-based Akim Gump swooped on Simmons & Simmons
20/04/2010
FSA to launch investigation into Goldman
The FSA has announced that it is to launch a formal enforcement investigation into Goldman Sachs following recent allegations made against the firm by the Securities and Exchange Commission (SEC).
The US regulatory body has accused Goldman of defrauding investors by selling them a collateralised debt obligation (CDO) but failing to tell them that US hedge fund Paulson & Co, which took a short position on the CDO, had played a role in selecting the security’s underlying assets.
Within nine months, almost of the mortgages in the CDO had been downgraded, resulting in losses of over $1bn for investors, but gains of approximately the same amount for Paulson & Co.
Goldman has denied any wrongdoing, describing the SEC’s allegations as “completed unfounded by law and fact”, and despite the accusations, has seen first-quarter earnings exceed analyst expectations with net income nearly doubling from $1.81bn to $3.41bn.
In a statement released today, the FSA said that it will be liaising closely with the SEC in the review.
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Editor's view: 8 February 2012
Speculative moves, a perceived landgrab and a potential bidding war in the hedge fund sector have all opened up in recent weeks
Comment: Julian Korek
"Advisers need to be analysing key considerations and determining where they fall in the spectrum of SEC registration; no easy task given the scope of the legislation"
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