Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Moody's exec: Goldman didn't tell us either

By Blake Ellis, staff reporter


(CNNMoney.com) -- During a hearing on Capitol Hill Friday, a former Moody's executive said he didn't know that hedge fund Paulson & Co. was involved in the selection of securities for a controversial Goldman Sachs portfolio.

"I did not know that and I'm fairly sure that my staff did not know either," said Eric Kolchinsky, a former managing director at Moody's who was involved in the rating of the portfolio at the center of the Goldman fraud case.

Kolchinsky testified before the Senate Homeland Security and Governmental Affairs Committee on Friday as part of its ongoing investigation of the role of credit rating agencies in the recent financial crisis. The hearing is the third in a series exploring the causes of the crisis.

The Committee's investigation coincides with fraud allegations against investment bank Goldman Sachs, which claim the firm misled investors by failing to disclose Paulson & Co.'s involvement in selecting mortgage securities for one of its portfolios, called ABACUS 2007-AC1, which Paulson & Co. was simultaneously betting against.

"It is something I would have wanted to know," Kolchinsky added. "It changes the whole dynamic of the structure when the people who are choosing it want it to blow up." To top of page

Index Last Change % Change
Dow 23,328.63 165.59 0.71%
Nasdaq 6,629.05 23.99 0.36%
S&P 500 2,575.21 13.11 0.51%
Treasuries 2.38 0.06 2.59%
Data as of 6:42am ET
Company Price Change % Change
General Electric Co 23.83 0.25 1.06%
Bank of America Corp... 27.17 0.59 2.22%
AT&T Inc 35.54 -0.15 -0.42%
Micron Technology In... 41.50 0.19 0.46%
PayPal Holdings Inc 70.97 3.72 5.53%
Data as of Oct 20
Sponsors

Sections

More than 5% of DACA recipients have started their own businesses since enrolling the program, according to a recent survey. More

Tax revenue and spending both rose in fiscal year 2017, which ended last month. But spending growth outpaced revenue growth, according new numbers from the federal government. More