Goldman Sachs targeted in Senate report
A 2-year investigation into Wall Street's part in the financial crisis points fingers at Goldman and its chief executive. With video.
And now some findings in the 639-page report could lead to criminal or civil prosecution by the Justice Department and regulators. You can read the report here (.pdf download).
A Senate panel has finished a two-year investigation into the financial crisis, looking at internal memos, emails and employee interviews, according to The Los Angeles Times. There's plenty of blame to go around here. Investigators found "heedless risk-taking," conflicts of interest and oversight failures.
There are also plenty of bad guys, and Goldman is at the top of the list. The panel's chairman, Sen. Carl Levin, D-Mich., said Goldman misled its clients and Congress.
Post continues after this video about the Senate report:
"Goldman was, I think, the only major bank that did well during the recession. We tried to find out, 'How is it they did well?'" Levin said Wednesday, the Times reports. "The tactics that they used . . . were disgraceful. And sticking it to their own clients violates their own claim that the clients come first."
The report claimed that Goldman sold mortgage-related securities to clients while secretly betting against the same investments. The issue came to light in one well-known case, the Abacus investments, but the report said there were three other occasions in which Goldman bet against securities it sold to clients.
Clients lost hundreds of millions of dollars in the Abacus deal, and Goldman eventually settled charges over the matter with the Securities and Exchange Commission to the tune of $550 million.
Levin wants to know whether Goldman broke the law and says he'd like the Justice Department and the Securities and Exchange Commission to find out. It's unclear whether the Abacus case can be revived, at least from a civil standpoint, after the SEC settlement, however.
Levin is also talking about whether perjury charges are in order against Goldman's chief executive, Lloyd Blankfein, who testified to Congress last year. Goldman insists Blankfein's testimony was truthful.
Investors were a little wary of Goldman today. The cost to protect the bank's debt hit a one-month high, Bloomberg reports.
The top Republican overseeing the investigation, Tom Coburn of Oklahoma, said the probe uncovered a "financial snake pit" full of greed and wrongdoing. "Blame for this mess lies everywhere from federal regulators who cast a blind eye (to) Wall Street bankers who let greed run wild and members of Congress who failed to provide oversight," he added.
But no one's gone to jail yet. When asked if that was disappointing, Levin responded: "There's still time."
With all the talk about the budget, White House negotiations with Tea Party conservatives, etc. the real crooks and thieves are on Wall Street... there is a special place in he11 for the lying bastards who bundled under-performing mortgages with worthless insurance and sold them to unsuspecting investors around the globe. This led to the watershed event that plunged the US economy into recession and the US dollar into crisis. We had no choice but to bail out these crooks but it turns out we could not afford it. Now we must balance the budget on the backs of school teachers and the poor... somebody needs some serious jail time.
Copyright © 2014 Microsoft. All rights reserved.
Ahead of Twitter's second-quarter earnings release, analysts are largely bullish, and investors are watching several metrics closely, especially user growth.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.