AP pointed out this NY Times article. This may be the story of the year:
By Daniel at 24 December, 2009, 6:57 am
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Goldman and other banksters investigated for selling “safe” synthetic CDO’s to their customers and then shorting these securities.
http://www.nytimes.com/2009/12/24/business/24trading.html?_r=1&pagewanted=all
” ….. But Goldman and other firms eventually used the C.D.O.’s to place unusually large negative bets that were not mainly for hedging purposes, and investors and industry experts say that put the firms at odds with their own clients’ interests.
“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”
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