Along with SEC, other investigators and suits may target Goldman Sachs
By Tomoeh Murakami Tse and Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, April 22, 2010
NEW YORK -- As investigators in Massachusetts considered charging Wall Street firms for their role in the financial collapse, they focused on Goldman Sachs because it had bundled and sold the shoddiest of subprime mortgage loans, setting up the housing market for a greater fall by continuing to sell shaky securities even as other banks withdrew.
After discussions with the office of state Attorney General Martha Coakley (D), Goldman last year agreed to pay up to $60 million to end that investigation, the first major settlement involving Wall Street's role in the subprime mortgage crisis.
"Goldman was particularly active with respect to facilitating the lending by two of the more notorious and unsound subprime lenders -- Fremont and New Century," Coakley said Wednesday. "Goldman was especially active with these companies in the latter stages of the subprime lending boom . . . when it should have been increasingly clear to any responsible person that the subprime loan pools underlying securitizations suffered serious problems."
Even before the Securities and Exchange Commission sued Goldman last week, accusing it of creating a complex financial product designed to fail and selling it to unknowing investors, the firm had become a frequent target of investigators. In courts and in Congress, Goldman has been accused of a range of misdeeds, including manipulating oil prices and using taxpayer money for handsome bonuses.
(More here.)
Washington Post Staff Writer
Thursday, April 22, 2010
NEW YORK -- As investigators in Massachusetts considered charging Wall Street firms for their role in the financial collapse, they focused on Goldman Sachs because it had bundled and sold the shoddiest of subprime mortgage loans, setting up the housing market for a greater fall by continuing to sell shaky securities even as other banks withdrew.
After discussions with the office of state Attorney General Martha Coakley (D), Goldman last year agreed to pay up to $60 million to end that investigation, the first major settlement involving Wall Street's role in the subprime mortgage crisis.
"Goldman was particularly active with respect to facilitating the lending by two of the more notorious and unsound subprime lenders -- Fremont and New Century," Coakley said Wednesday. "Goldman was especially active with these companies in the latter stages of the subprime lending boom . . . when it should have been increasingly clear to any responsible person that the subprime loan pools underlying securitizations suffered serious problems."
Even before the Securities and Exchange Commission sued Goldman last week, accusing it of creating a complex financial product designed to fail and selling it to unknowing investors, the firm had become a frequent target of investigators. In courts and in Congress, Goldman has been accused of a range of misdeeds, including manipulating oil prices and using taxpayer money for handsome bonuses.
(More here.)
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