WEST PALM BEACH, Fla., April 28, 2011 (GLOBE NEWSWIRE) -- The law firm of Dimond Kaplan & Rothstein, P.A. (http://www.dkrpa.com) announces that it is investigating claims involving investment losses suffered in Collateralized Debt Obligations ("CDO's") that Goldman Sachs ("Goldman") sold to its clients.
A report by the Senate Permanent Subcommittee on Investigations (the "Report") alleges that in selling CDOs to its clients, Goldman misled its clients and that Goldman's CDO activities were fraught with "multiple conflicts of interest."
Three of the CDOs that the Senate Report references are: Timberwolf I, Hudson Mezzanine 2006-1, and Anderson Mezzanine 2007-1.
The Report states that after issuing Timberwolf in March 2007, Goldman shorted (i.e., bet against) approximately 36 percent of the assets underlying Timberwolf. According to the Report, although Goldman's internal valuations showed that Timberwolf's value was continuing to fall, Goldman represented to one prospective buyer that a 60 percent return could be expected. The Senate Report further claims that Goldman sold Timberwolf to one client at approximately 78 cents on the dollar, when Goldman internally valued the securities purchased at only 55 cents on the dollar.
Hudson Mezzanine 2006-1 ("Hudson") was issued in December 2006. According to the Report, although Goldman had bet heavily against Hudson, Goldman told investors that it had "aligned incentives" with investors. The Report called that representation "misleading" because Goldman's $6 million investment in Hudson was outweighed heavily by Goldman's $2 billion short position in the same security. The Report claims that Goldman made a $1.35 billion profit from Hudson at the expense of its clients.
The Report alleges that Goldman engaged in similar practices with regard to Anderson Mezzanine 2007-1 ("Anderson"). The Senate Report alleges that Goldman bet that 40 percent of the assets underlying Anderson would decline in value, but did not disclose that to investors. The Report further claims that Goldman expressed reservations about the quality of Anderson's underlying subprime mortgages, but did not disclose those reservations to investors. According to the Report, investors in Anderson ultimately lost virtually their entire investments.
If you have suffered losses in conjunction with any of the foregoing CDO products issued by Goldman, or any other financial instruments issued, sold, or recommended by Goldman, you may contact the attorneys at Dimond Kaplan & Rothstein, P.A. for a free case evaluation.
Dimond Kaplan & Rothstein, P.A. is an AV-Rated law firm that represents individual and institutional investors nationwide in stockbroker misconduct and investment fraud cases. They have represented investors in claims related to stocks, bonds, options, hedge funds, and various structured products. If you suffered losses in CDOs or other securities issued, sold, or recommended by Goldman Sachs, or if you have suffered investment losses resulting from stockbroker misconduct, please contact Jeffrey B. Kaplan, Esq. or Jared A. Levy, Esq. of Dimond Kaplan & Rothstein, P.A. at (305) 374-1920 or (561) 671-1920 (jkaplan@dkrpa.com or jlevy@dkrpa.com) for a free case evaluation. You also may visit Dimond Kaplan & Rothstein, P.A. on the web at www.dkrpa.com.
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