Treasury has faced mounting accusations that its relationships with big banks are too cozy. , filed a civil action against Goldman Sachs Group Inc. Treasury said this was an indication it was driving a hard bargain, asking more than the banks were willing to pay. On October 12, 2021, Chew King Tan (Tan or Plaintiff), individually and on behalf of all others similarly situated, represented by Thomas Livezey Laughlin, IV of Scott+Scott, L.L.P. If the two sides can’t agree on a price, the banks are allowed to auction the warrants.Įarlier this month, a bipartisan congressional watchdog claimed the Treasury was selling the warrants for one-third less than they’re worth, potentially shorting taxpayers up to $2.7 billion.īut some banks, including JPMorgan Chase & Co., elected to sell the warrants at auction.
The agency’s offers reflect financial modeling and surveys of market participants. The Treasury announced in June that it would value the warrants through negotiation with the banks.
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Goldman’s announcement comes at a time of big debate over how to value the warrants. “The process we designed on valuation worked to protect taxpayers.” “Taxpayers have gotten a good return on their investment,” the Treasury said in a statement. Goldman has already paid back the $10 billion loan, as well as paying $318 million in preferred dividends on the investment.Ĭombined with the warrant repurchases, Goldman has paid the government $1.42 billion, for an annualized return of 23 percent. The investment bank said it believes the value of the warrants, as determined by the Treasury, was fair.Īs part of the Treasury’s $10 billion preferred stock investment in the bank last fall, the government received warrants that would have enabled it to buy Goldman shares at a set price in 10 years. Treasury under the Troubled Asset Relief Program for $1.1 billion. In yet another multi-billion-dollar settlement with the Department of Justice resulting from the 2008 housing bubble collapse, Goldman Sachs has now been ordered to pay 5.1 billion for failing to vet its mortgage-backed securities in a move that helped contribute to the economic crisis this country has never really recovered from. said Wednesday it has repurchased warrants given to the U.S. Article first appeared at Thedailysheeple.