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.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
At least 35 people were killed and dozens more injured when a man plowed his car into pedestrians exercising around a sports center in the southern Chinese city of Zhuhai on Monday night. Footage showing bodies lying on the pavement appeared on social media in the hours after the crash, but had vanished by early Tuesday morning, and local police reported only “injuries.” It took officials nearly 24 hours to reveal that dozens had died — in one of the country’s deadliest incidents in years. China heavily monitors social media platforms, where it is common for words and topics deemed
Typhoon Usagi yesterday had weakened into a tropical storm, but a land warning issued by the Central Weather Administration (CWA) was still in effect in four areas in southern Taiwan. As of 5pm yesterday, Tropical Storm Usagi was over waters 120km south-southwest of Oluanpi (鵝鑾鼻), the southernmost tip of Taiwan proper, and was moving north at 9kph, CWA data showed. The storm was expected to veer northeast later yesterday. It had maximum sustained winds of 101kph, with gusts of up to 126kph, the data showed. The CWA urged residents of Kaohsiung, Pingtung County, Taitung County and the Hengchun Peninsula (恆春) to remain alert to
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