A German state bank said it had severed business ties with Goldman Sachs Group Inc, citing US regulators’ allegation that the dominant Wall Street bank committed fraud, while France eyed an investigation of its own.
Goldman is accused of defrauding investors by failing to say that prominent hedge fund manager John Paulson bet against a Goldman subprime debt product that he helped design.
In the latest sign that the US Securities and Exchange Commission’s (SEC) allegations could hurt Goldman’s standing with some customers, the SEC complaint was cited by German public sector bank BayernLB as it cut business ties with Goldman.
Another German bank, IKB Deutsche Industriebank AG, was one of the main investors in the Abacus synthetic collateralized debt obligation deal that is the focus of the complaint.
Goldman, which is being investigated by the SEC and Britain’s market watchdog, is also attracting attention in France.
French Economy Minister Christine Lagarde said on Wednesday that the accusations also warranted a full probe by French regulators. Regulator Autorite des Marches Financiers said earlier this week that it planned to cooperate with the SEC over the Goldman case if necessary, adding on Wednesday that it aimed to publish an update on the probe next week.
Newly released official documents showed that Goldman aggressively increased political campaign donations and lobby spending in Congress earlier this year as the financial reform debate gathered momentum.
In another sign that Goldman and its Wall Street allies are struggling to gain traction in Washington, a US Senate committee approved on Wednesday a bill aimed at reforming the derivatives market, moving the Senate one step closer to passing sweeping regulation over the US$450 trillion derivatives market.
Criticism from some quarters that the SEC suit was politically motivated was fueled by the revelation this week that the SEC’s commissioners were split 3-2 on whether to pursue the complaint, with both Republican commissioners dissenting.
US President Barack Obama, who has made regulatory reform a cornerstone of his agenda, said “categorically” that the SEC had never discussed the case with the White House.
SEC Chairperson Mary Schapiro also denied that there was any political motivation for the probe.
“We will neither bring cases, nor refrain from bringing them, because of the political consequences,” she said in a statement. “We will be governed always and only by the facts and the law.”
Meanwhile, the sole Goldman Sachs employee being sued by the SEC in the case, 31-year-old Frenchman Fabrice Tourre, has agreed to testify at a Senate hearing next week, Bloomberg News reported.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
CELEBRATION: The PRC turned 75 on Oct. 1, but the Republic of China is older. The PRC could never be the homeland of the people of the ROC, Lai said The People’s Republic of China (PRC) could not be the “motherland” of the people of the Republic of China (ROC), President William Lai (賴清德) said yesterday. Lai made the remarks in a speech at a Double Ten National Day gala in Taipei, which is part of National Day celebrations that are to culminate in a fireworks display in Yunlin County on Thursday night next week. Lai wished the country a happy birthday and called on attendees to enjoy the performances and activities while keeping in mind that the ROC is a sovereign and independent nation. He appealed for everyone to always love their