There was a major development in a lawsuit last week that every investor should know about — and worry about.
- But nobody is paying attention.
A New York federal judge appointed three law firms to serve as lead counsels in a multi trillion-dollar litigation accusing Goldman Sachs, Barclays Capital and 18 other financial institutions of rigging the market for US government securities.
What’s at stake?
A lot of money, to be sure. But even more important is the integrity of the US financial markets.
Back in May, The Post explained how the Justice Department was looking into whether Goldman Sachs, run by longtime Chief Executive Lloyd Blankfein, was getting preferential treatment during US government bond auctions. Goldman, according to a source, had astonishing success in winning auctions between 2007 and 2011.
Goldman Sachs win streak is focus of Treasury-rigging probe
I suspect there was collusion between Washington and Goldman, perhaps for noble reasons but largely to keep bond prices high and interest rates low, since the two move in opposite directions.
Low rates help borrowers like the federal government and hurt savers.
As I’ve been saying for years, the government’s and Federal Reserve’s rigging of the bond market which resulted in a secret tax on savers.
The law firms that were given jurisdiction over the civil suit are probably smart enough to realize that Washington doesn’t want any of this to come out. So the class-action litigants will have tremendous leverage as this case moves forward.