Goldman Subpoenaed Over Senate Report
The legal troubles at Wall Street titan Goldman Sachs (NYSE:GS) may be growing deeper.
Goldman has been subpoenaed by the Manhattan District Attorney's office and New York State in response to information that came to light in a Senate report that accused the bank of misleading buyers of mortgage-backed securities.
A request for a subpoena does not necessarily mean a company is the target of a criminal investigation.
A Goldman spokesman said, We dont comment on specific regulatory or legal issues, but subpoenas are a normal part of the information request process and, of course, when we receive them we cooperate fully.
The Senate report, intended to examine the causes of the crisis and not necessarily aimed at bring new legal actions, was the product of a two-year investigation that pored over millions of documents and dozens of interviews.
The report shows a financial snake pit rife with greed, conflicts of interest and wrongdoing, Sen. Carl Levin, head of the Senate panel, recently said.
After the report was released, it was referred to the Department of Justice and Securities and Exchange Commission, both of which could use the documents for new legal actions against the bank.
Goldman doesnt believe its legal troubles to end here. The bank expects a subpoena from the Department of Justice imminently, as early as this afternoon, FOX Businesss Charles Gasparino reported. The DOJ probe is putting more pressure on Blankfein to step down, but he wont budge.
Shares of Goldman came under new selling pressure on the Bloomberg report, dropping 1.75% to $133.76. The stock has lost almost 20% so far this year and was recently downgraded to sell by influential analyst Dick Bove, who said he is worried about the regulatory clouds.