Audit Notes: Goldman Dig, Fox Biz Strikes, Super-Senior Slip-up

Matthew Goldstein of Reuters digs out some interesting information on the Goldman scandal. He names Gail Kreitwoman as one of the Goldman employees interviewed by the SEC in its investigation:

But in a lengthy legal filing submitted to the SEC last September, lawyers for Goldman Sachs try to explain away the emails between Kreitman and ACA executive Laura Schwartz. Goldman’s attorneys contend that Kreitman did not intend to give ACA officials the impression that the hedge fund was either an equity investor or “long” on the deal.

“The fact that Ms. Kreitman did not correct Ms. Schwartz’s statements that Paulson was an equity investor does not indicate that she attempted to conceal the truth from ACA,” said lawyers from the New York firm Sullivan & Cromwell, Goldman’s outside counsel.

Kreitman left the firm last summer.

— Fox Business, which like Bloomberg has been suing the Federal Reserve to force it to disclose who its been bailing out, has expanded its lawsuit to add a year and a half to its timeframe:

The network filed its new suit this afternoon in New York requesting documents from the Federal Reserve Board of Governors that will name each financial institution that borrowed from the various emergency lending facilities from November 1, 2008 through March 1, 2010. FOX Business originally sued the Fed for those documents but for a time period that ended on November 1, 2008.

The network scored a major victory in the original suit when the second circuit court of appeals ruled that the Fed had to turn over the requested documents.

Good job, guys. (h/t Chris Roush)

Reuters’s Felix Salmon has more on The Wall Street Journal’s scoop today on Goldman’s misleading self-defense on Abacus and Paulson. Kate Kelly reported that Goldman lost $90 million because the market turned on it and it couldn’t unload its position in time. Goldman says that means it’s innocent!

This is surely exactly right. We’ve already seen that it took Goldman a full five weeks after the deal closed just to wrap the 45% of the super-senior tranche that it did manage to get off its books — and it did so at the end of May 2007, when the mortgage market was hitting three-month highs and there was a lot of hope in the market that the early-2007 crash in the ABX index had been a short-lived aberration.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.