Goldman Sachs has been under fire as of last, having denied investor requests to investigate bonuses and angered tax payers looking for a return in dollars dedicated to the financial institutions. Now, further controversy is surrounding the bank, as many call into question the currency exchanges performed with Greece in 2002.
U.S. and EU regulators are investigating the transactions, which appear to have been designed to help Greece mask the breadth of its deficits. Additionally, they are looking into the possibility that Goldman sought to capitalize on it’s inside information of Greece’s debt position by investing in credit default swaps. Swaps have gone up in value as anxiety over Greece’s debt has grown.
According to Bloomberg, Goldman received roughly $1 billion for the transaction that remained concealed from many prospective investors. Congress will hold hearings to discuss the Goldman Greece transactions though one economist, Martin Wolf of the Financial Times is coming out to declare that Goldman, by 2002 laws was not in the wrong.
The deal, though not widely publicized to potential investors was discussed and investigated in Risk Magazine in 2003 and deemed to be legal, if fool hardy.
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