SEC accuses Goldman Sachs, Fabrice Tourre of defrauding investors

"The product was new and complex, but the deception and conflicts are old and simple," SEC enforcement director Robert Khuzami said in a statement. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party."

The SEC suit also drags into a legal maelstrom the legendary hedge fund manager John Paulson

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Side Note:

John Paulson has been heavily investing in precious metals making a fortune off the subprime collapse.