Goldman Sachs and SAC Capital maintain close links

Lloyd Blankfein

Goldman Sachs CEO Lloyd Blankfein once again highlighted the close relationship between his firm and embattled hedge fund SAC Capital.

'They’ve been indicted, they haven’t been convicted', Blankfein said during an interview on CNBC. 'We are a big liquidity provider, we’re a major prime broker. That would be a quite an existential decision for them if all the liquidity providers withdrew liquidity on the basis of an indictment which they’re contesting'.

'The government wouldn’t want us to withdraw that, because if everybody withdrew liquidity, you would vaporize a firm', Blankfein continued. 'The government did come back and encourage firms like ours to continue to deal with SAC'.

Bloomberg Businessweek reported that he cited Enron-tainted accounting firm Arthur Andersen, which shut down right after it was indicted, leading to thousands of job losses. The current situation was preferable, Blankfein said, because it allowed prosecutors to bring charges against SAC without triggering a 'nuclear' option and instantly forcing it to close.

To access the complete Bloomberg Businessweek article hit the link below

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