Former Goldman executive can’t say whether bank should have sold what it knew was a ‘shi**y deal.’
Today, a group of current and former Goldman Sachs employees are testifying before the Senate Permanent Subcommittee on Investigations regarding whether or not the investment bank misled investors by selling assets that it knew were junk and was actively betting against. One of these assets, known as Timberwolf, was a collateralized debt obligation that allowed investors to bet on subprime mortgages. According to emails obtained by the committee, Goldman executives acknowledged that Timberwolf “was one shi**y deal,” but the firm continued to sell the asset to investors. The subcommittee’s chairman, Sen. Carl Levin (D-MI), grilled former Goldman executive Dan Sparks for selling Timberwolf as a “top priority,” even after the “shi**y deal” email was written. Sparks repeatedly refused to answer the question, leading Levin to say that “if you can’t give a clear answer to that one, Mr. Sparks, I don’t think we’re going to get too many clear answers from you.” Watch it:
Timberwolf lost more than 80 percent of its value within five months of its issuance.