According to a Times report out tonight, top executives at Goldman Sachs played a key role in overseeing the mortgage unit now being targeted by the SEC. Though company vice-president Fabrice Tourre was the only one named in the suit, there were reportedly many others who were aware of the development of the “Abacus investment” mortgage deals, the Times says, based on interviews with eight former Goldman employees who, of course, wished to remain anonymous.
“Senior bank executives played a pivotal role in overseeing the mortgage unit just as the housing market began to go south,” Times reporter Louise Story writes, “ Executives up to and including Lloyd C. Blankfein, the chairman and chief executive, took an active role in overseeing the mortgage unit as the tremors in the housing market began to reverberate through the nation’s economy. It was Goldman’s top leadership that finally ended the dispute on the mortgage desk by siding with those who, like Tourre and [Jonathan] Egol, believed home prices would decline.”
Spokesman Lucas van Praag has maintained that senior executives were not involved in the deals under investigation, and Tourre and Egol declined to speak with the Times for the story. With this, news of the upcoming $5 billion bonuses, and rumors of imminent charges from Germany and the U.K., it’s not the greatest Sunday for Goldman.