Goldman faces civil fraud charges by the Securities and Exchange Commission for how it packaged and marketed a complex collateralizeddebtobligation in 2007.
The charge is in connection with the sale of a synthetic collateralizeddebtobligation that was tied to the performance of subprime residential mortgage-backed securities.
In that case the SEC alleged that Goldman misstated and omitted key facts regarding a synthetic collateralizeddebtobligation (CDO) it marketed which hinged on the performance of subprime residential mortgage-backed securities.
Mr. Buffett mounted a vigorous defense of Goldman, the embattled firm in which he is a major investor, arguing that the identity of the investor betting against the collateralizeddebt obligation hedge fund manager John Paulson would have been irrelevant to the investor betting on the underlying subprime mortgages.
He said they joked that they planned to down a shot of liquor every time the CEO used the word "synthetic, " a reference to the type of collateralized-debt obligation for which Goldman has been accused of fraud by the Securities and Exchange Commission.