Saturday, April 16, 2011

Goldman Sachs Credit-Default Swaps Jump as Levin Claims Bank Duped Clients

The cost to protect debt issued by Goldman Sachs Group Inc. (GS) jumped to a one-month high after the chairman of the Senate panel that investigated the financial crisis said the bank misled clients and Congress about investments in securities tied to mortgages.

Credit-default swaps on the New York-based company climbed 5.6 basis points to 116.9 basis points at 8:50 a.m. in New York, according to data provider CMA. That’s the highest level since 118.1 basis points on March 17.

Senator Carl Levin said he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought collateralized debt obligations without knowing the firm was betting they would fall in value.

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