Goldman Sachs, Illegal Market Manipulation, and Short Squeezes
June 19, 2014 Leave a comment
In 2011, the U.S. Senate Permanent Subcommittee on Investigations said Salem and other Goldman Sachs traders tried to manipulate prices of derivatives linked to subprime home loans in 2007 for their own benefit. The subcommittee’s assertions were based in part on Salem’s self-evaluation, in which he wrote “we began to encourage the squeeze with plans of getting very short again after the short squeeze caused capitulation of these shorts.”
Goldman Sachs denied any attempted manipulation.
“The translation of that sentence is, you know — is very different than it was, at times, made out to be,” Salem said at the hearing. “There’s no wrongdoing in that sentence.”