Friday 30 April 2010
In a letter to Attorney General Eric Holder sent Wednesday, 62 members of the House asked the Justice Department to begin a criminal investigation of Goldman Sachs and other firms that possibly committed fraud.
“If both global and domestic confidence in the integrity of the U.S. financial system is to be regained, there must be confidence that criminal acts will be vigorously pursued and perpetrators punished,” the House members, led by Rep. Marcy Kaptur (D-Ohio), wrote in the letter.
The Securities and Exchange Commission (SEC) filed a civil suit against Goldman Sachs on April 16 accusing it of securities fraud, accusing it of selling mortgage investments that it was betting would fail without telling its clients. Though these were first intended to protect Goldman from losses if the housing market soured, it created more of these securities over time to make large amounts of money as the market worsened.
Goldman earned a record $4.79 billion in the last fiscal quarter of 2009.
The SEC alleges that Goldman created the investments – known as collateralized debt obligations (CDOs) – and then bet on them based on the advice of John Paulson after paying him $15 million to devise such investments that were likely to decline.
To read the whole article, go to the link below: