Goldman Gets Fed Slapdown on Ultimate Fighting Loan
- Regulators have expressed concern over cash-flow adjustments
- Central bank is clamping down on risky lending practices
UFC fighter Chris Leben, left, battles UFC fighter Jake Rosholt during their bout at the Rose Garden Arena in Portland, Oregon, on August 29, 2009.
Photographer: Jon Kopaloff/Getty ImagesFederal Reserve regulators reprimanded Goldman Sachs Group Inc. a second time for flouting lending guidelines in a risky debt deal it arranged for the $4 billion buyout of Ultimate Fighting Championship.
The rebuke came after the bank appealed an earlier risk warning from the regulators, according to people with knowledge of the matter who asked not to be identified as it is private. The regulator now considers it a substandard loan, the people said. That’s a lower rating than the Fed’s prior classification of the deal as a so-called special mention, which was based on its concerns over accounting adjustments that inflated cash flow projections for the mixed martial arts promoter.