Close eye on Gold­man

Hos­pi­tals gaug­ing fall­out from Se­nate hear­ings

Modern Healthcare - - Cover Story - Vince Gal­loro

Hos­pi­tal sys­tems that have em­ployed Gold­man Sachs Group to man­age their bond of­fer­ings said they are closely mon­i­tor­ing whether last week’s ex­plo­sive Se­nate hear­ings on the firm will have any ef­fect in the mar­ket.

Seven cur­rent and for­mer Gold­man Sachs of­fi­cials tes­ti­fied be­fore the Se­nate’s Per­ma­nent In­ves­ti­ga­tions Sub­com­mit­tee. Sen­a­tors ex­co­ri­ated the of­fi­cials and read from Gold­man e-mails that de­scribed some mort­gage-backed se­cu­ri­ties sold to clients as “junk” and “crap,” ac­cord­ing to the As­so­ci­ated Press. The Se­cu­ri­ties and Ex­change Com­mis­sion filed a civil com­plaint in April against Gold­man and one for­mer Gold­man trader, al­leg­ing that the com­pany de­frauded in­vestors by mis­stat­ing and omit­ting key facts re­gard­ing a fi­nan­cial prod­uct re­lated to sub­prime mort­gages. A crim­i­nal in­ves­ti­ga­tion of the com­pany by the U.S. at­tor­ney in Man­hat­tan also was re­ported last week by the Washington Post.

In his re­marks to the sub­com­mit­tee, Gold­man CEO Lloyd Blank­fein said the firm did not bet heav­ily against mort­gagere­lated se­cu­ri­ties and lost $1.2 bil­lion on

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