Goldman Sachs Group (NYSE:
) escaped charges levied against the firm by the Department of
Justices probe for its role in the mortgage-backed-securities
The bank announced early Friday that the Securities and Exchange
Commission concluded its investigation into the sale of $1.3
billion in subprime residential mortgage-backed securities.
Both the DOJ and the U.S. attorney's office for the Southern
District of New York had reviewed Goldman Sachs' role in the
mortgage crisis and concluded there would be no criminal
prosecution in regard to Goldman Sachs or its employees.
"The department and investigative agencies ultimately concluded
that the burden of proof to bring a criminal case could not be met
based on the law and facts as they exist at this time," the Justice
Department said in a statement late on Thursday.
, a spokesman for Goldman Sachs in a brief email said, "We are
pleased that this matter is behind us."
While the bank may be "pleased", former Inspector General of the
Troubled Asset Relief Fund Neil Barosky was not and concluded that
no individual or institution to date has been held accountable in
any meaningful way.
The Senate's Permanent Subcommittee led by Senator Carl Levin (
) of Michigan, spent more than a year investigating Goldman Sachs
and in particular focused on the banks' CEO Lloyd Blankfein and
whether he had misled investigators while testifying about a number
of auspicious deals. However Levin and the Justice Department
failed to prove any wrong doing.
In a somewhat related matter, but separate probe Goldman was
notified by the SEC had concluded an investigation into a $1.3
billion subprime mortgage deal. The inquiry into a specific package
of subprime mortgages in Freemont, California, (also known as Home
Loan Trust 2006-E), involved Wells Fargo (NYSE:
), J.P. Morgan Chase (NYSE:
) and Goldman Sachs.
NY Times reported
, "Mortgage products were in many ways ground zero in the financial
crisis," Robert Khuzami, the agency's enforcement director, said at
a news conference for the task force.
Back in 2011, Wells Fargo was forced to pay $85 million in fines
and compensation to borrowers. At the time the Federal Reserve
announced that this was the largest consumer-enforcement penalty
announced in its quarterly filing
Thursday that the SEC, "staff does not intend to recommend any
Goldman's shares were 1.1 percent to $103.60, the highest price
in three months on a closing basis. Look for further advancement in
shares has the bank has put two exhaustive investigations behind
The large institutional banks remain mired in scandalous
The DOJ is investigating
) in the LIBOR fixing incident. HSBC (NYSE: ) has been charged in a
money- laundering scheme. Also, J.P. Morgan has received criticism
concerning the "London Whale Trade" and its inability to monitor
risk. Although the market has factored in subsequent fines and
penalties, these stocks need careful examination on a daily
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