Goldman CEO Blankfein Calls Fraud Case 'Totally Political'

(April 23, 2010) — Following the Securities and Exchange Commission’s fraud charges against Goldman Sachs, Chief Executive Officer Lloyd Blankfein contacted private equity executives and other clients calling the allegations “totally political,” according to the Financial Times.

In a string of phone calls to clients, Blankfein added that the accusations “hurt America,” the FT reported, with some clients under the impression that the CEO’s aggressive counter signals that Goldman will flight the charges in court.

Goldman Sachs’ role in the financial crisis is under continued scrutiny, as the SEC tries to prove its allegation that Goldman and one of its vice-presidents committed fraud by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was waning. The case has led to increased scrutiny on the credit rating agencies that provided inflated marks for risky securities and some analysts and academics predict the government’s fraud suit against Goldman may lead President Obama to push more rapidly for financial overhaul.

Amid the turbulence, Goldman Sachs Asset Management has hired PIMCO’s former deputy-head of European business development, Marc Heel, as head of the Benelux region. Previously, Heel worked with NIB Capital, ABP and PFZW, and at the pension fund for the electronics manufacturer, Philips, Financial News reported. Van Heel will start next month, joining other recent recruits including Martin Hoogendijk, formerly of BlackRock Inc. and Yvo van der Poll, Financial News said.