Just In: SEC Charges Goldman with Fraud Over CDO

Just broke on CNBC apparently. (I heard it on a stock message board.)

SEC Charges Goldman Sachs With Fraud On Subprime Mortgages (4/16/2010 Business Insider)

"This just broke on CNBC, and the NYT has a huge story about this already....

"Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.

"The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers."

For more on Goldman Sachs (and others) structuring CDOs that they designed specifically to fail, read here, here, here.

And this is what the news did to the stock market the moment it broke:

Tweet