Goldman May Challenge Senate Report

(June 6, 2011) — Goldman Sachs may soon release documents to counter a Senate report.

In April, the Senate Permanent Subcommittee on Investigations released a 639-page report on the financial crisis, alleging that Goldman executives misled clients in order to reap profits, and then proceeded to lie to Congress when questioned about its actions. The lengthy report was completed after a two-year probe of the mortgage business that led to financial collapse. It concluded that Goldman mismanaged conflicts of interest, putting its interests above all others.

The Wall Street Journal reported that Goldman Sachs may release documents about its mortgage bets to show that the analysis by the subcommittee was inaccurate and incomplete. Even if the documents aren’t made public, the banking giant could use them to challenge investigations that assert that Goldman misled clients about mortgage-linked securities.

Already, Goldman has released hundreds of millions of pages of information to the Senate Permanent Subcommittee on Investigations and to the Federal Crisis Inquiry Commission. “Goldman is a high-octane, high-profile target,” Dick Beckler, a partner in Bracewell & Giuliani’s white-collar defense practice, told Reuters.

Last week, Goldman Sachs received a subpoena from the New York District Attorney’s office. Meanwhile, the bank is also being investigated by the Justice Department and the Securities and Exchange Commission.  

The string of inquiries into Goldman Sachs’s behavior comes as the federal government is working with attorneys general around the country to reach a settlement with the biggest banks in the US over accusations of illegal foreclosures and fraudulent mortgage practices.