Politics & Government

November 3, 2009

Goldman left foreign investors holding the subprime bag

When Goldman Sachs decided it was time to ditch the subprime mortgage business, it put together a sales pitch through a Cayman Islands subsidiary that may have seriously understated the riskiness of the securities it was selling. One bond analyst told his clients that the deal was "a not so cleverly disguised way for Goldman ... to unload its unwanted exposures ... onto foreign investors." But many investors bit — and lost.

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