A big hat tip to the FT’s Francesco Guerrera here.
There’s so much here worthy of discussion, it is difficult to know where to start.
The first doc is dated September 10 2009 and runs to 49 pages, including appendix. This is Goldman’s first substantive response to the Wells Notice from the SEC, which informed the bank that it was under investigation.
The second doc is dated September 25 2009 and runs to 20 pages. This is Goldman’s follow-up submission after a meeting with SEC officials on September 15.
A small taster:
The bottom line is that no amount of disclosure would change that the very sophisticated investors already knew that some entity or entities by necessity had to take a short position, and that any and all participants – including themselves – might express their views as to the reference portfolio. None of these descriptions contains any concrete, analyzable information that might educate the sophisticated institutional investors that typically purchase synthetic CDOs. Regardless of who selected them, the offering documents for each of the reference securities disclosed detailed information on their underlying assets, as required by Regulation AB. It is this concrete information on the assets – not the economic interest of the entity that selected them – that investors could analyze and use to inform their decisions.
Angry Goldman lambasts fraud charges – Francesco Guerrera, FT