The Commission brings this securities fraud action against Goldman, Sachs & Co. (“GS&Co”) and a GS&C6 employee, Fabrice Tourre (“Tourre”), for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation (“CDO”) GS&Co structured and marketed to investors. This synthetic CDO, ABACUS 2007ACI, was tied to the performance of subprime residential mortgage-backed securities (“RMBS”) and was structured and marketed by GS&Co in early 2007 when the United States housing market and related securities were beginning to show signs of distress. Synthetic CDOs like ABACUS 2007-ACI contributed to the recent financial crisis by magnifying losses associated with the downturn in the United States housing market.
The Securities and Exchange Commission announced that it filed today an enforcement action in the U.S. District Court for the Southern District of New York, charging Hazem Khalid Al-Braikan, a resident of Kuwait, and three related foreign entities for engaging in an illicit scheme through which they reaped millions of dollars in profits from trading around hoax offers to acquire U.S. companies. The SEC obtained an emergency court order to freeze more than $5 million in trading profits that it has located in various accounts in their names.
For at least a decade, R. Allen Stanford and James M. Davis executed a massive Ponzi scheme through entities under their control, including Stanford International Bank, Ltd. (“SIB”) and its affiliated Houston-based broker-dealers and investment advisers, Stanford Group Company (“SGC”) and Stanford Capital Management (“SCM”). Stanford and Davis, acting in concert with the other defendants, misappropriated billions of dollars of investor funds and falsified SIB’s financial statements in an effort to conceal their fraudulent conduct.