4/20/10 at 9:30 AM
Goldman Sachs’s first-quarter earnings increased by 91 percent, but these better-than-expected results still were not enough to overshadow the civil suit the SEC filed against the bank on Friday for allegedly misleading investors.
Even the Wall Street analysts from insider banks such as Deutsche Bank and Credit Suisse wanted to talk about the lawsuit on the Tuesday-morning earnings call, which Goldman, in an unusual move, opened to the public.
Goldman's general counsel, Greg Palm, spent the first part of the conversation laying out the case for the company's innocence.He says the bank had no economic incentive to create a portfolio of mortgage investments it knew would fail. (The bank lost more than $100 million by making the long bet against the housing market, he says). But the main thrust of his argument was that the parties involved in the Abacus deal were not some wide-eyed investors. They were savvy and familiar enough with Wall ...