Goldman Sachs’ role in financial crisis investigated
(15 April 2011 – United States) The United States Department of Justice will investigate Goldman Sachs for allegedly making "misleading and inaccurate" comments to congress over its role in the financial crisis.
The bank claimed at the time in 2008 that it did not have a ‘big short’ position on the US housing market in the run-up to the crisis, when internal documents including emails show that it did.
Senator Carl Levin co-authored the 650 page report into the causes of the financial collapse and said it was up to officials to decide whether to prosecute Goldman Sachs for lying to a Senate committee in 2010.
'Whether or not that constitutes perjury is for somebody else to decide. We are not the appropriate authority,' Mr Levin said.
The committee also uncovered new evidence that the bank had deliberately misled some of its clients over the risks associated with the complex mortgage-backed securities sold to them.
In public statements and in evidence to the committee, Goldman Sachs stated that it "did not take a large ‘bet’ against the US housing market", yet documents within the report show that it was.
A spokesman for Goldman Sachs refuted the senator's allegations.
'Our testimony was truthful and accurate. We have never denied having a big short position, but we had it because we had a big long position and the numbers prove that point,' he said.
He noted that the mortgage business has never been more than two percent of Goldman's revenue, adding that the bank made a profit of only US$500 million (A$474 million) on its mortgage business in 2007 and a loss of US$1.2 billion in 2008.
Senator Carl Levin co-authored the 650 page report into the causes of the financial collapse and said it was up to officials to decide whether to prosecute Goldman Sachs for lying to a Senate committee in 2010.
'Whether or not that constitutes perjury is for somebody else to decide. We are not the appropriate authority,' Mr Levin said.
The committee also uncovered new evidence that the bank had deliberately misled some of its clients over the risks associated with the complex mortgage-backed securities sold to them.
In public statements and in evidence to the committee, Goldman Sachs stated that it "did not take a large ‘bet’ against the US housing market", yet documents within the report show that it was.
A spokesman for Goldman Sachs refuted the senator's allegations.
'Our testimony was truthful and accurate. We have never denied having a big short position, but we had it because we had a big long position and the numbers prove that point,' he said.
He noted that the mortgage business has never been more than two percent of Goldman's revenue, adding that the bank made a profit of only US$500 million (A$474 million) on its mortgage business in 2007 and a loss of US$1.2 billion in 2008.
Subscribe