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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Saturday, December 8, 2012

Goldman Sachs's Toxic Assets for 2006: Fortius II Funding Ltd.

The Financial Crisis Inquiry Commission has compiled a list of CDOs (collateralized debt obligations) including both documentation and marketing materials which includes Fortius II Funding Ltd. here and here.  These CDOs were some of the most toxic assets, according to the FCIC, that contributed to the financial crisis of 2008.  Fortius II Funding Ltd was one of those bad assets that Goldman Sachs was peddling in 2006.

Now we are reading about CIFG Assurance North America Inc.'s suit against Goldman Sachs for making misrepresentations in connection with that portfolio:
Goldman in Mediation With CIFG to Settle Mortgage Suit
By Chris Dolmetsch - Bloomberg Businessweek

Goldman Sachs Group Inc. (GS) and CIFG Assurance North America Inc. retained a mediator as the two companies seek to settle a lawsuit in New York state court in Manhattan, according to a filing.
The insurer sued Goldman Sachs in New York State Supreme Court in August 2011, accusing the New York-based investment bank of making misrepresentations in connection with the securitization of a portfolio of 6,204 mortgage loans.

The two sides have participated in one mediation session and have scheduled another for Dec. 19, according to a document filed in court yesterday. 

Read the whole article here


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