For Immediate Release
Chicago, IL – March 23, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include The Goldman Sachs Group Inc. ( (GS - Free Report) , Citigroup Inc. ( (C - Free Report) , JPMorgan Chase & Co. ( (JPM - Free Report) , HSBC Holdings Plc ( and M&T Bank Corp. ( (MTB - Free Report) .
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: https://at.zacks.com/?id=5513
Here are highlights from Thursday’s Analyst Blog:
Goldman Sachs in Trouble, Again
According to Reuters, the federal judge in New York rescinded the bid filed by The Goldman Sachs Group Inc. ( (GS - Free Report) regarding the dismissal of a lawsuit charged against the bank, accusing it of selling risky debts. The US District Judge, Victor Marrero, has ordered the plaintiff, Dodona I LLC, to pursue the proceedings over its claims against Goldman relating to the $2 billion offering of collateralized debt obligations (CDOs).
Established in 2007, hedge fund Dodona filed a lawsuit against Goldman in the federal court in New York over Hudson Mezzanine Funding 2006-1 and 2006-2 CDOs. The securities offered to the investors, were residential mortgage-backed securities.
CDOs typically repackage bonds and other assets into new securities. These are not traded on a public exchange, allowing firms like Goldman to generate fees through brokering deals between buyers and sellers. However, CDOs have performed miserably since these were invested in securities comprising sub-prime mortgages, which are known to have larger-than-average risk of defaulting in the market. Eventually, the market downturn ruined the investment banker's expectations, resulting in huge losses for the common investors.
The complaint lodged claims that Goldman deceptively sold the sub-prime mortgage-linked securities that gradually failed. In addition to that, it misrepresented the value of instrument by providing materially misleading statements.
According to Dodona, the investment followed Goldman's guidance, which indicated that the market for such securities had stabilized and this is a suitable time to enter into such markets. According to the suit, Goldman sold those investments having the idea of non-performance of such securities. The hedge fund's $4 million investment turned into huge losses in October 2007.
For the last few months, Goldman has been facing a number of lawsuits related to mortgage-backed securities. In 2010 also, Goldman settled a charge by paying $550 million for not disclosing the role of a hedge fund while formulating the CDOs to the buyers, taking a short position as well as betting on them to perform poorly in the open market.
The SEC has stepped up its investigation on Wall Street companies over the sale of CDOs that were responsible for the financial crisis and the significant losses suffered by the investors.
The continuously increasing number of lawsuits will dent Goldman's reputation and its financials. However, investors, who have lost their hard-earned money in such investments, should feel relieved.
Among other banks, Citigroup Inc. ( (C - Free Report) , JPMorgan Chase & Co. ( (JPM - Free Report) , HSBC Holdings Plc ( and M&T Bank Corp. ( (MTB - Free Report) have also been legally accused for misrepresenting documents related to mortgage-backed securities and other losses in 2011.
Goldman currently retains its Zacks #3 Rank, which translates into a short-term 'Hold' rating. Considering the fundamentals, we also maintain a long term 'Neutral' recommendation on the stock.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: https://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: https://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at https://at.zacks.com/?id=5518.
Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339