The Financial Crisis Inquiry commission is aiming to release its findings on the causes of the financial crisis in January. It is unclear how it will react to Goldman Sachs' claims that it had nothing to do with the collapse of two Bear Stearns credit funds that helped spark the crisis.
Recall that Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannen were tried and acquitted on fraud charges that they sold out while investors took big hits.
One big issue in the controversy--one the FCIC is probing--is whether Goldman (NYSE: GS) as prime broker helped spawn the decline in the value of these funds with its valuations of portfolio holdings. Goldman has responded forcefully that it had nothing to two with the twin collapse, notes Reuters.
The firm turned over documents to the commission showing that its valuations of mortgage securities in April 2007 and May 2007 were nearly identical to the valuations it provided to the two Bear hedge funds in March 2007. Goldman also produced emails detailing conversations between the two firms, supporting the idea that the bonds weren't marked down enough to spark a crisis.
Goldman Sachs contends that the biggest write-downs came from other prime brokers.
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