Tuesday, May 03, 2011
Senate report on Goldmine Sachs referred to Justice Dept.
In what would normally be the first formal step to a criminal investigation, Senators Carl Levin and Tom Coburn, the Democratic chairman and senior Republican on the Permanent Subcommittee on Investigations have referred their investigation of Goldmine Sachs to the Department of Justice.
A U.S. Senate report that said Goldman Sachs Group Inc. (GS) misled clients about mortgage-linked securities was formally referred to the Justice Department and the Securities and Exchange Commission, which are reviewing its findings.As I noted in the beginning, normally Goldmine Sachs would find itself in deep shit. In these times the DoJ under AG Holder prefers to go after medical marijuana users and online pokers players. The idea of applying the law and taking down one or more of the Masters Of The Criminal Universe is alien to his job description.
Senators Carl Levin and Tom Coburn, the Democratic chairman and senior Republican on the Permanent Subcommittee on Investigations, have signed a referral letter asking the agencies to examine the panel’s report, Levin said today in an interview. The results of the investigation, made public by the committee April 13, pinned much of the blame for the credit crisis on Wall Street banks that earned billions by enticing clients to buy the risky bond deals.
“If something comes up that needs to be reviewed by some agency, it gets referred,” said Levin. “That’s the way we do it.”
The scrutiny is a setback for Goldman Sachs, which hired lawyers, lobbyists and public relations specialists to monitor the two-year investigation and tamp down any controversy that arose from the subcommittee’s conclusions.
John Hart, Coburn’s spokesman, did not respond to a request for comment. SEC spokesman John Nester declined to comment.
A formal referral from the Senate is “much more than a symbolic gesture” because it would prompt an agency to put the matter “at the top of its list,” said Robert Hillman, a professor at the University of California, Davis, School of Law.
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