"Vampire Squid" Goldman Sachs confesses it is being investigated for helping Greece hide its debts
Source: dailymail.co.uk
Goldman Sachs has admitted that it is under investigation for helping Greece to hide its vast debts.
The controversial Wall Street bank - nicknamed the Vampire Squid because its tentacles stretch far and wide - is accused of having profiteered out of a complex currency deal that helped Greece massage its finances.
In a regulatory filing in the U.S., Goldman disclosed that is 'subject to a number of investigations and reviews by various governmental and regulatory authorities in connection with its financial transactions with Greece.
The European Commission has already been probing the bank's relationship with Athens. It is unclear from the disclosure, how many other countries might be looking into its dealings with the Mediterranean state.
The Wall Street giant is claimed to have received as much as £192m in fees by entering a complex currency transaction in 2001 that helped Athens borrow cash without putting it on the books as a loan.
The so-called 'swap' deal helped Greece meet eurozone limits on government borrowing.
The arrangement was allowed under European Union rules, but is now coming under much closer scrutiny because of the financial meltdown of the Mediterranean state.
The Greek deficit stands at nearly 13 per cent of GDP and public debt is almost twice the official ceiling at 113 per cent of GDP.
Goldman Sachs was once seen as the invincible bank that could beat other firms hands down. It has always paid vast sums of cash to its employees, so it can employ the hottest talent in the financial world.
But in recent weeks, the bank's supremacy in financial markets has been placed under threat by the revelation that it is being investigated for fraud by the U.S. authorities.
America's Securities and Exchange Commission accuses Goldman of misleading its own clients and encouraging them to invest in a product that was destined to fail.
The lawsuit centres on trades set up by its sub-prime mortgage trader Fabrice Tourre, who has since been placed on 'administrative leave'.
Goldman's dealings are also being probed by the UK regulator, the Financial Services Authority.
Source: dailymail.co.uk
