Goldman profiting from naked shorting of leveraged loans

The hits keep coming for Goldman Sachs, the one-time Teflon firm of Wall Street. The latest: Two funds have told the Loan Syndications and Trading Association that they think Goldman Sachs helped drive down prices of leveraged loans via naked short selling, reports Bloomberg. If true, that would mean Goldman is acting contrary to its clients' best interests. This sort of trading is not illegal per se, but given the political moment, it would not go over well. Of course, it's hard to ascertain exactly what is going on. The leveraged loan market is still a source of anxiety across the Street. Shorting was once unheard of in the market, Bloomberg notes, but times have changed. It seems like it would be hard to short the market, because it would require finding someone to speculate they would be poised to rise.

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