Date: August 11 2012
FEDERAL authorities ended two separate investigations into the actions of Goldman Sachs during the financial crisis, handing a quiet victory to the bank after years of public scrutiny.
The Justice Department said late on Thursday that there was ''not a viable basis to bring a criminal prosecution'' against Goldman or its employees after a Congressional committee asked prosecutors to examine if the bank was involved with any illegal acts related to several mortgage deals.
The Senate's Permanent Subcommittee on Investigations had examined toxic mortgage securities that Goldman sold to investors, who later sustained steep losses during the crisis. The subcommittee also suggested prosecutors investigate whether the bank's chief executive, Lloyd Blankfein, had misled lawmakers during public testimony.
Separately, Goldman Sachs said early on Thursday that the Securities and Exchange Commission had ended an investigation into a $US1.3 billion subprime mortgage deal, taking no action. The move was an about-face for the commission, which had notified the bank in February that it planned to pursue a civil action.
The moves end a difficult chapter for the bank, whose missteps became emblematic of Wall Street's excess. But for all the public criticism of the bank, the only law enforcement case to surface against Goldman was a civil case that the bank settled for $US550 million in 2010 over a mortgage investment that investigators say was intended to collapse.
The announcements are also the latest indication that federal investigations into the financial crisis are petering out as the deadline to file cases approaches. While the SEC has brought more than 100 financial crisis-related cases, the agency was looking to take on a big case aimed at punishing Wall Street for its role in the crisis.
After President Barack Obama announced in January a special taskforce to investigate the residential mortgage mess, the SEC and other authorities vowed to hold the banks accountable. Wall Street packaged and sold subprime mortgages to investors, as well as the government-owned mortgage finance giants Fannie Mae and Freddie Mac, which suffered billions in losses.
The subcommittee focused on a group of mortgage deals that Goldman arranged and sold to investors. It was also suggested Mr Blankfein may have misled lawmakers when testifying about the deals.
On Thursday, the Justice Department said it concluded ''the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time''. It said it would pursue the case again if new evidence emerged.
NEW YORK TIMES
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