Criminal Investigation Reported for Goldman Sachs

It is widely reported that U.S. prosecutors are looking into the mortgage trading activities of Goldman Sachs Group and its employees. The New York Times and The Wall Street Journal reported on April 30 that the SEC had referred civil fraud charges that the agency had brought against Goldman Sachs on April 16 to the U.S. prosecutor for criminal investigation.

Goldman Sachs Group Spokesperson Michael DuVally provided this statement to via email: "Given the recent focus on the firm, we are not surprised by the report of an inquiry. We would fully cooperate with any requests for information."

SEC Spokesman John Nestor said in an email that the SEC could not "confirm or deny" referring the SEC's civil fraud charges against Goldman Sachs to the U.S. prosecutor.

The SEC charged Goldman Sachs & Co. (GS&Co), and an employee, Fabrice Tourre, with fraud on April 16, "for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation ("CDO") GS&Co structured and marketed to investors," according to the SEC complaint. The SEC demanded a jury trial in the civil case.

Goldman Sachs Group executives testified before Congress's Investigations Subcommittee on April 27. See news article, "Goldman Trader Tourre Denies SEC Fraud Charges in Congressional Testimony," and opinion, "Listening to Goldman."

Requests to The U.S. Attorney in New York for confirmation of the criminal investigation had not been returned by press time.

See related article: "Fiduciary Issue Comes to the Fore in Goldman Hearings."

Kate McBride ( is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.

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