World Business
US launches criminal probe into Goldman Sachs
By James Vicini and Martinne Geller (China Daily)
Updated: 2010-05-01 09:54
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WASHINGTON - US federal prosecutors in New York have begun investigating Goldman Sachs Group Inc, raising the possibility of criminal charges against the company or its employees, a source said.
Goldman, the world's most powerful investment bank, said it was not surprised at the news. "Given the recent focus on the firm, we are not surprised by the report of an inquiry," a Goldman spokesman said. "We would fully cooperate with any requests for information."
The investigation from the Manhattan US Attorney's Office ramps up pressure on Goldman less than two weeks after it was charged by the US Securities and Exchange Commission with civil fraud for allegedly hiding information from investors about a mortgage-related security.
It comes only days after Goldman CEO Lloyd Blankfein and other executives faced blistering cross-examinations from lawmakers at a Washington hearing into their behavior in trading mortgage-related products as the US housing market began to crumble in 2007.
Goldman, which had prided itself on its government connections, is now facing one of the biggest crises in its history.
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On Tuesday, Blankfein said Goldman was doing some soul searching and going over its business practices as a result of the accusations it was facing.
It was not immediately clear precisely which transactions prosecutors are investigating or whether there was a strong possibility that criminal charges could be brought.
News of the probe was first reported by the Wall Street Journal, which said it resulted from a referral from the SEC.
A spokeswoman for the office of the Manhattan US Attorney said she could "neither confirm nor deny" any Goldman investigation.
Reuters
