Page 626 - untitled

Notes to Chapter 12 597

14. Tetsuya Ishikawa, email to Darryl Herrick, October 11, 2006, Senate Permanent Subcommittee on
Investigations, Exhibit 170c; Geoffrey Williams, email to Ficc-Mtgcorr-desk, October 24, 2006, Senate
Permanent Subcommittee on Investigations, Exhibit 170d.
15. Fabrice Tourre, email to Jonathan Egol and others, December 28, 2006, Senate Permanent Sub-
committee on Investigations, Exhibit 61.
16. Daniel Sparks, email to Tom Montag, January 31, 2007, Senate Permanent Subcommittee on
Investigations, Exhibit 91.
17. Fabrice Tourre, email to Marine Serres, January 23, 2007, Senate Permanent Subcommittee on
Investigations, Exhibit 62.
18. Lloyd Blankfein, email to Tom Montag, February 11, 2007, Senate Permanent Subcommittee on
Investigations, Exhibit 130.
19. FCIC calculations using data from “2004–2007 GS Synthetic CDOs,” produced by Goldman
Sachs.
20. Gretchen Morgenson and Louise Story, “Banks Bundled Bad Debt, Bet Against It and Won,” New
York Times, December 24, 2009.
21. Lloyd Blankfein, testimony before the FCIC, First Public Hearing of the FCIC, first day, panel 1:
Financial Institution Representatives, January 13, 2010, transcript, pp. 26–27.
22. “Goldman Sachs Clarifies Various Media Reports of Aspect of FCIC Hearing,” Goldman Sachs
press release, January 14, 2010.
23. Gary Cohn, testimony before the FCIC, Hearing on the Role of Derivatives in the Financial Crisis,
day 1, session 3: Goldman Sachs Group, Inc. and Derivatives, June 30, 2010, transcript, p. 267.
24. Michael Swenson, opening statement, Hearing on Wall Street and the Financial Crisis: The Role of
Investment Banks, Senate Permanent Subcommittee on Investigations, pp. 2–3.
25. Complaint, Basis Yield Alpha Fund v. Goldman Sachs Group, Inc., et al. (S.D.N.Y. June 9, 2010),
p. 29.
26. Blankfein, testimony before the FCIC, January 13, 2010, transcript, p. 140.
27. Craig Broderick, written testimony for the FCIC, Hearing on the Role of Derivatives in the Finan-
cial Crisis, day 1, session 3: Goldman Sachs Group, Inc. and Derivatives, June 30, 2010, p. 1.
28. Craig Broderick, email to Alan Rapfogel and others, May 11, 2007, Senate Permanent Subcommit-
tee on Investigations, Exhibit 84.
29. High Grade Risk Analysis, April 27, 2007, p. 4; High Grade—Enhanced Leverage Q&/A, June 13,
2007, stating “the percentage of underlying collateral in our investment grade structures collateralized by
“sub-prime” mortgages is approximately 60. On the March 12, 2007, investor call, Matthew Tannin told
investors that “most of the CDOs that we purchased are backed in some form by subprime” (Conference
Call transcript, pp. 21–22).
30. Email from matt.tannin@gmail.com to matt.tannin@gmail.com, November 23, 2006.
31. Matthew Tannin, Bear Stearns, email to Chavanne Klaus, MEAG New York, March 7, 2007.
32. BSAM Conference Call, April 25, 2007, transcript, p. 5.
33. Matt Tannin, Bear Stearns, email to Klaus Chavanne, MEAG New York, March 7, 2007; Matthew
Tannin, email to Steven Van Solkema, March 30, 2007; Complaint, SEC v. Cioffi, No. 08 Civ. 2457
(E.D.N.Y. June 19, 2008), p. 32.
34. Jim Crystal, Bear Stearns, email to Ralph Cioffi (and others), March 22, 2007; Ralph Cioffi, Bear
Stearns, email to Ken Mak, Bear Stearns, March 23, 2007.
35. Warren Spector, testimony before the FCIC, Hearing on the Shadow Banking System, day 1, ses-
sion 1: Investment Banks and the Shadow Banking System, May 5, 2010, transcript, pp. 83–84.
36. Information provided to FCIC by legal counsel to Bank of America, September 28, 2010.
37. Ibid.
38. Alan Schwartz, interview by FCIC, April 23, 2010. Notably, as one of only two tri-party repo clear-
ing banks, JP Morgan had more information about BSAM’s lending obligations than did most other mar-
ket participants or regulators. As discussed in greater detail later in this chapter, this superior market
knowledge later put JP Morgan in a position to step in and purchase Bear Stearns virtually overnight.
39. Email from Goldman to Bear, April 2, 2007.
40. Steven Van Solkema, Bear Stearns, internal email, Summary of CDO Analysis Using Credit
Model, April 19, 2007.