Goldman Sachs: Karmic Payback Time?

Update: Today Democracy Now interviewed Gretchen Mortgenson, a prominent Wall Street Analyst, who says that there are two sets of rules, one for the powerful, the other for the rest of us, and that not a single Goldman Sachs banker will face criminal prosecution.

I find it astonishing that one of the biggest Goliaths in the global financial meltdown actually carries the name “Goldman.” Even better: “Goldman sacks.” Sacks of gold. Sacking the banking system . . . Sounds like a sitcom or comic book.

Subpoena Lands on Doorstep of Goldman Sachs

  • By Nathan Koppel
  • June 2, 2011
  • Wall Street Journal
Bloomberg News
Lloyd Blankfein, CEO of Goldman, testifying at a Senate subcommittee hearing in 2010.

The Manhattan District Attorney’s Office has subpoenaed Goldman seeking information on its business dealings, a move prompted by a recent U.S. Senate report that was highly critical of the bank.

Here’s a WSJ report on the development, andone from AP. The reports do not offer details about the precise scope of the subpoena.

In its 639-page report, the Senate Permanent Subcommittee on Investigations in April accused Goldman of betting against the housing market and failing to adequately warn investors about the dangers of risky mortgage securities it promoted.

Goldman has said repeatedly that it simultaneously took “long” and “short” positions on mortgages as part of its normal business, WSJ reported in this earlier piece about the Senate report. Goldman usually had a bullish overall bet during the housing crisis and thus suffered losses when the real-estate bubble burst, according to WSJ.

The subpoena does not necessarily mean charges will be forthcoming against Goldman. A spokesman for the bank said, “We don’t comment on specific regulatory or legal issues, but subpoenas are a normal part of the information request process and, of course, when we receive them we cooperate fully.”

Goldman currently is being probed by other regulators, including the New York Attorney General’s Office and the SEC, WSJ reports. In addition, the bank earlier turned over tens of millions of documents to the Senate Permanent Subcommittee on Investigations.

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