Did Goldman Sachs put their clients first?

Despite some media releases and a variety of statements that proclaim that Goldman Sachs always puts their clients first, it appears not everyone agrees with that. Newsweek reports on the SEC filing a complaint against the financial giant that in part states:

And at Goldman, according to Friday's SEC complaint, some clients are clearly more important than others. The case alleges that at the behest of one client, the hedge fund Paulson & Co., Goldman cobbled together a CDO (a collection of mortgages) that it would then sell in pieces to other customers. Paulson wanted Goldman to create the CDO just so it could bet against it—Paulson thought the mortgages in the CDO would default at a high rate, thus rendering big chunks of it worthless. It's kind of like a developer (Paulson) commissioning a construction firm (Goldman) to build a condominium tower while purchasing insurance that would pay off in case it fell down. But the SEC complaint alleges the scheme went a step further. The SEC says that Goldman worked with Paulson and ACA, a "portfolio selection agent," to ensure that the edifice was composed of defective and subpar materials. The SEC presents evidence that ACA, as Goldman watched, included in the CDO specific assets that Paulson had chosen. Goldman then proceeded to sell condos (slices of CDOs) to other Goldman clients without telling them of the hazardous design. "In sum, GS&Co arranged a transaction at Paulson's request in which Paulson heavily influenced the selection of the portfolio to suit its economic interests, but failed to disclose to investors, as part of the description of the portfolio selection process contained in the marketing materials used to promote the transaction, Paulson's role in the portfolio selection process or its adverse economic interests," reads the SEC suit.

CNN also reports and so does the Wall Street Journal.