From NBC's Jenna Pfeffer and Ali Weinberg
A funny thing happened at today's fiscal/deficit-reduction forum.
During an interview with CBS' Bob Schieffer, former President Bill Clinton suggested that he didn't believe investment bankers at Goldman Sachs deserved the heaping condemnation they've received from Congress and the public for profiting from allegedly recommending and selling securities that were expected to fail.
"I think they're really mad about the SEC deal," Clinton said, referring to the Securities and Exchange Committee's investigation into trades made by Goldman upon the recommendation of hedge fund manager John Paulson, who bet that the derivatives would fail by buying insurance against the investments of third parties whom Goldman assured were buying strong financial products.
"I think they think the timing was suspect and they don't believe they violated the law," he continued, adding that he was "not sure" whether the timing between the SEC investigation and Congress' attempt to pass financial regulatory reform legislation meant the two bodies conspired to frame Goldman Sachs and use them as a scapegoat for the excesses of the financial industry.
"I've read a lot of material on this and I'm not sure they violated the law by not telling people that John Paulson suggested the securities that would be in the CDO (collateralized debt obligation) because of the ability of people on the other side to get information," Clinton said, suggesting that the burden rests with investors to gain information about the kind of financial product they were investing in.