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.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College