Maybe Edwin Chin sold some residential mortgage-backed bonds. Maybe he lied about the price at which Goldman Sachs bought them. Maybe none of this ever happened and he's just taking a two-year time out from the industry and writing a sizable check for no reason in particular. WHO'S TO SAY, REALLY? Not Edwin.
In his work, Mr. Chin negotiated transactions for hedge funds and other clients that were buying and selling the bonds, sometimes out of Goldman’s own holdings. Bonds like the ones Mr. Chin traded are not publicly listed, so transactions between buyers and sellers are negotiated with the help of a dealer. The bank makes money by selling bonds for more than it buys them, but a dealer can make that spread wider by taking advantage of the lack of pricing information in the market. In a civil settlement announced on Tuesday, the Securities and Exchange Commission said that Mr. Chin had repeatedly abused his duty as an intermediary to increase Goldman’s trading profits, and thus, indirectly, his own compensation. The S.E.C. said his activity reaped an extra $1.5 million in trading profit for the company...Mr. Chin reached the settlement without admitting or denying wrongdoing.