|
Abacus 2007-AC1 Special – Has the famous Wall Street firm Goldman Sachs committed fraud on the brink of the subprime debacle?
Fabrice Tourre (product designer at G.S.') and Goldman Sachs & Co. are named for : “for making
materially misleading statements and omissions in connection with a synthetic collateralized debt
obligation (“CDO”) GS&Co structured and marketed to investors.”
The CDO under scrutiny is by nature a complex derivative and structured product launched April 2007
by Goldman Sachs and the asset management firm ACA Capital. The Abacus notes perform similarly to
a collection of mortgage loans pooled in what the contract called the Reference Portfolio but open no rights
for the investors onto the underlying assets, instead the proceeds are invested in other collaterals and in
OTC default risk protection contracts – the now famous Credit Default Swaps or CDS – which replicates
the performance and risks of the Reference portfolio.
| 
