Goldman Sachs is heading for further public opprobrium today following claims that the firm managed $15 billion worth of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its budget deficit.

Bloomberg reports that Goldman failed to mention the arrangement, a lapse that may have allowed Goldman and Greece to get an inflated price for the bonds. "The price of bonds should reflect the reality of Greece's finances," says Bill Blain at Matrix Corporate Capital in London. "If a bank was selling them to investors on the basis of publicly available information, and they were aware that information was incorrect, then investors have been fooled."

Goldman Sachs, Wall Street's most profitable investment and securities firm, whose CEO Lloyd Blankfein (above) is reportedly due to pick up a $100m bonus for 2009, has declined to comment on this latest allegation. Since 2002 it has earned approximately $735 million euros underwriting Greek bonds. Two days ago, the Greek Finance Minister George Papaconstantinou said the swaps devised by Goldman to manage debt were "at the time legal" but are no longer used.

http://www.thefirstpost.co.uk/59812,business,greek-crisis-investors-fooled-by-goldman-sachs?DCMP=NLC-daily