Obama's OMB Pick Lew Headed Citi Unit That Shorted Housing
Imagine if President Obama's new OMB head had worked at one of the biggest Wall Street bailout recipients and headed a group that profited by shorting the housing market. That would be a public relations nightmare, but it also appears to be the reality the administration faces with the Jacob Lew nomination. His Citigroup unit had a big investment in the hedge fund run by John Paulson, also at the center of the SEC's Goldman Sachs lawsuit. The hedge fund made billions of dollars by shorting the housing market. And the Citi unit ramped up its investment after Lew became its head. Shahien Nasiripour from the Huffington Post reports:
During Lew's tenure atop Citi's Alternative Investments group, the Multi-Adviser fund significantly increased its investment in Paulson's fund, more than doubling Citi's investment to $41.5 million by March 2008. On paper the firm's investment was worth $55.2 million, accounting for 9.7 percent of the fund's total assets to rank as its second-biggest investment, SEC filings show.
The next quarter, the value of the investment jumped to $60.3 million, making it the biggest part of the Multi-Adviser fund.
Read the full story at the Huffington Post.