Investment banking giant Goldman Sachs is facing a criminal probe for its role in the credit collapse of 2008.
Julia Xanthos/News
Manhattan District Attorney Cy Vance Jr. Manhattan District Attorney Cy Vance has a fat new target: Wall Street titan Goldman Sachs, which got hit with a subpoena into its actions right before the 2008 credit collapse.
The subpoena stems from a scathing 639-page Senate report accusing Goldman of deliberately selling toxic mortgage-backed securities to unsuspecting clients, knowing the housing market was about to crash.
Vance's office would not comment, but a law enforcement source confirmed a Bloomberg News report about the subpoena.
Nearly three years after the bottom fell out of the housing market, sending the economy spinning into the worst recession since the 1930s, not one Wall Street fat cat has gone to jail - even as evidence mounts that many knew their complicated mortgage-related deals were garbage.
Critics complain that the rich bankers who torched the economy are being treated as "too big to jail."
But there has been a growing move to go after the big banks that survived the crisis - especially the 142-year-old Goldman Sachs.
Last year, the SEC accused Goldman of defrauding investors of more than $1 billion by talking up complex subprime mortgage-related securities that it knew were toxic, then betting against those funds and profiting when they tanked.
Goldman settled that case for $550 million.
A Goldman spokesman said the firm would cooperate fully with Vance's investigation.
It is the Manhattan DA's first big foray into white-collar crime, which was the bread and butter of his venerable predecessor, Robert Morgenthau.
Vance has had some high-profile losses, including last month's decision by a Manhattan jury to acquit two cops charged with rape.
No comments:
Post a Comment