Federal Prosecutors Investigating Goldman Sachs
Reports say the bank could face criminal charges.
April 29, 2010 at 08:00 PM
4 minute read
The original version of this story was published on Law.com
The Wall Street Journal reported Thursday that federal prosecutors are looking into whether Goldman Sachs Group committed securities fraud. Sources told the paper that the U.S. Attorney's Office in Manhattan is in preliminary stages of an investigation into Goldman Sachs' mortgage trading practices.
Prosecutors are said to be reviewing the SEC's civil lawsuit against Goldman, which the agency filed two weeks ago alleging the financial institution defrauded shareholders in connection to collateralized debt obligations that were designed to fail.
The case could be difficult for prosecutors due to its complexity and the heightened level of proof required in criminal cases. If prosecutors do bring charges, however, it may be the worst news yet for embattled Goldman Sachs. As the WSJ writes:
[I]n the more than two-century history of the U.S. financial markets, no major financial firm has survived criminal charges. Securities firms E.F. Hutton & Co. and Drexel Burnham Lambert Inc. crumbled after being indicted in the 1980s. In 2002 Arthur Andersen LLP went bankrupt after it was convicted of obstruction of justice for its role in covering up an investigation into Enron Corp. The conviction was later overturned by the Supreme Court.
The Wall Street Journal reported Thursday that federal prosecutors are looking into whether
Prosecutors are said to be reviewing the SEC's civil lawsuit against Goldman, which the agency filed two weeks ago alleging the financial institution defrauded shareholders in connection to collateralized debt obligations that were designed to fail.
The case could be difficult for prosecutors due to its complexity and the heightened level of proof required in criminal cases. If prosecutors do bring charges, however, it may be the worst news yet for embattled
[I]n the more than two-century history of the U.S. financial markets, no major financial firm has survived criminal charges. Securities firms E.F. Hutton & Co. and Drexel Burnham Lambert Inc. crumbled after being indicted in the 1980s. In 2002 Arthur Andersen LLP went bankrupt after it was convicted of obstruction of justice for its role in covering up an investigation into Enron Corp. The conviction was later overturned by the Supreme Court.
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