An investor class action claiming Goldman Sachs Group
Inc. bet against its own products can go forward, a federal
judge ruled Wednesday in an opinion critical of the giant's
allegedly "cynical" conduct in the run-up to the financial
U.S. District Judge Victor Marrero ruled that hedge fund Dodona I
LLC can pursue almost all of its claims related to $1.2 billion
worth of Goldman-created collateralized debt obligations that
became junk as their underlying assets collapsed.
The decision repudiates Goldman's theory that it was legal to
structure products so that it wins when buyers lose as long as it
is dealing with sophisticated investors.
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