Cramer on Friday said that Goldman Sachs may not have bet against its own clients with a collateralized debt obligation issued in 2007. He described the report as a “game changer,” saying it strongly contradicts the charges brought against Goldman by the Securities and Exchange Commission.
The SEC this morning charged Goldman with securities fraud, Reuters reported, claiming the bank sold to unwitting investors a subprime mortgage CDO, called ABACUS, that was both put together and shorted by hedge fund Paulson & Co. Fabrice Tourre, the 31-year-old Goldman vice president primarily responsible for creating the CDO was charged with fraud as well.
But Cramer countered those charges, citing his own sources, by saying that Goldman was “not shooting against the client.” In fact, he said that Goldman had invested about $90 million in the ABACUS CDO.
“My information is that Goldman Sachs was an investor in this particular security,” Cramer said, “not a short seller.”
“I think that’s a very important fact,” he said, adding that while he couldn’t reveal his sources, he did say they “indicate that this is true.”
That “may explain the incredible confidence they had,” Cramer said of Goldman. He pointed out that neither Tourre nor his manager had yet been fired, which is what would have happened “if this were an open and shut case.”
Cramer's charitable trust owns Goldman Sachs.
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