Senators Slam Goldman in Release of Financial Crisis Report

"In my judgment, Goldman clearly misled their clients and they misled the Congress," Levin. “They gained at the expense of their clients, and they used abusive practices to do it," he said.

In a statement, Goldman denied wrongdoing.

The Levin-Coburn report expands on evidence gathered at four Subcommittee hearings in April 2010, examining four aspects of the crisis through case studies that include: 

• High-risk mortgage lending, using the case of Washington Mutual Bank, a $300 billion thrift that became the largest bank failure in U.S. history;
• Regulatory inaction, focusing on the Office of Thrift Supervision’s failed oversight of Washington Mutual;
• Inflated credit ratings that misled investors, examining the actions of the nation’s two largest credit rating agencies, Moody’s and Standard & Poor’s; and
• The role played by investment banks, focusing primarily on Goldman Sachs, creating and selling structured finance products that foisted billions of dollars of losses on investors, while the bank itself profited from betting against the mortgage market.

The report then details 19 recommendations to address the conflicts of interest. The recommendations advocate for the implementation of the new restrictions on proprietary trading and conflicts of interest and action by the SEC to rank credit rating agencies according to the accuracy of their ratings.  Other recommendations seek to advance low risk mortgages, greater transparency in the marketplace, and more protective capital, liquidity, and loss reserves.