The Corner

Is Goldman Sachs Guilty of Fraud?

Today Andy McCarthy and I debated whether Goldman Sachs’ omission of the fact that John Paulson helped build a security designed to fail constitutes fraud. Andy thinks all the players in the investment were grown-ups, and Paulson’s involvement wasn’t material. Andy also wonders how Goldman could be guilty of fraud if Paulson is not. I say that if I were betting on a baseball team, I’d like to know if the guy betting against the team was the coach or general manager who built the team.

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