SEC deputy director to participate in Goldman Sachs case

20 May 2010

Lorin Reisner, deputy director of enforcement at the Securities and Exchange Commission (SEC), will be taking part in the legal case against Goldman Sachs.

The regulator filed a notice of appearance for the proceedings indicating he will be a member of the SEC team attending the case.

Goldman Sachs and vice-president Fabrice Tourre were accused of misleading investors by the SEC by not providing full details on an investment product tied to subprime mortgages.

According to the filing, the financial institution failed to divulge that hedge fund Paulson & Co had played a part in selecting the instrument, then bet against its performance.

Jacob Frenkel, a former SEC enforcement division attorney, was quoted by Bloomberg as saying: “It sends a strong message that the enforcement division is both stepping up to the plate and standing behind its case.

“It’s unusual, but it’s a logical and brilliant move when you have skilled trial lawyers who are part of senior management who step forward.”

Meanwhile, figures from Goldman Sachs showed it reported a ‘perfect’ first quarter during the first part of the year.

Traders working for the bank posted a profit on every day of the initial three months of 2010.

By Jim Ottewill

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