Goldman Sachs Faces Criminal Probe Into ‘Shi**y’ Mortgage Deals
April 30, 2010
(ChattahBox)— The Wall Street Journal is reporting that the U.S. Justice Department is launching a preliminary criminal probe into Goldman Sachs’ subprime mortgage trading. This news comes as another blow to the financial giant that is also battling an SEC civil suit for fraud. That “shi**y deal” that was discussed in an internal memo uncovered by a Congressional panel, is now coming back to haunt Goldman.
According to the WSJ, federal prosecutors have not yet made the decision to press criminal charges. “The investigation from the Manhattan U.S. Attorney’s Office, which is at a preliminary stage, stemmed from a referral from the Securities and Exchange Commission, these people say.” [...]
“The criminal probe raises the stakes for Goldman, Wall Street’s most powerful firm. The investigation is centered on different evidence than the SEC’s civil case, the people say. It couldn’t be determined which Goldman deals are being scrutinized in the criminal investigation.”
Besides the SEC suit for fraud and a criminal probe, Goldman also faces negative press, after a group of former and present executives testified before a Senate panel earlier in the week, displaying varying degrees of arrogance and disdain regarding their role in the financial meltdown. Goldman and its cast of Wall Street characters, including “Fabulous Fab” Tourre, are fast becoming the public face of Wall Street’s naked greed.
After news broke of a criminal investigation, Goldman shares fell 2.6% in after-hours trading to $156.08.
See the Wall Street Journal for more.