Goldman Fraud Victims? Homeowners, Not Investors

You probably already know that the Securities and Exchange Commission alleges that hedge fund Paulson & Co handpicked stinker mortgage-backed securities to put into an investment pool, then bet that the pool would fail. Goldman didn't even buy the securities themselves – it just took investors' money based on other bankers' securities. Like theater impresario Max Bialystock said in "The Producers," "It's a surefire flop!"

But what exactly were those securities? Paulson & Co worked with the investment pool's official picker, a company called ACA Management, to agree on 90 mortgage-backed securities pools. Goldman then combined their riskiest pieces and sold them to investors around the world. Here's the pitch they received.

And, boy, were these mortgage-backed securities some of the stinkiest. Of course, any educated investor should have known that. After all, the warnings went on for page after page in the offering documents. Too bad the average individual mortgage-holder didn't have the same information.