The Securities and Exchange Commission (SEC) filed charges today against financial giant Goldman Sachs claiming the firm defrauded investors by a selling them mortgage-backed securities (subprime mortgages) the firm suspected were likely to fail. Goldman, and select clients, then bet against those investments and profited when the housing bubble burst. Investors lost more than 1 billion. Goldman calls the allegations “unfounded in law and fact” and plans to vigorously defend itself against the suit. The company’s stock fell 16% today, the lowest the stock has sunk in over a year.
Dean Baker, economist and co-director of the Center for Economic Policy and Research
Mary Bottari, director of the Real Economy project for the Center for Media and Democracy