Goldman Sachs

Forensic accounting

Fraud at Goldman Sachs

The recent recession and financial scandal brought to light many unethical, illegal, and quasi-legal practices of the major investment firms. One example of this was the Goldman Sachs securities fraud case, in which the firm was accused of creating and selling bundled mortgage investments in an instrument that was intended to fail and which the company' bet against' with a desire to make a profit (Storey & Morganson 2010).

The government's case against Goldman Sachs concerned Abacus 2007-AC1, one of 25 investment vehicles specifically created to allow its clients to "bet against the housing market" (Storey & Morganson 2010). This "initially protected Goldman from losses when the mortgage market disintegrated and later yielded profits for the bank" (Storey & Morganson 2010). Ironically, one of the initial marvels of the credit crisis was the degree to which Goldman appeared to emerge unscathed, in...
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