Goldman Sachs will not be prosecuted by DOJ in financial investigation
The U.S. Justice Department said it will not pursue criminal charges against Goldman Sachs or its employees related to accusations that the firm bet against the same subprime mortgage securities it was selling to clients.
David Wells (left) and Goldman Sachs breathes a sigh of relief as the DOJ dropped their investigation. photo/Grace Villamil
The decision not to prosecute Goldman, a firm held up by critics as a symbol of Wall Street greed during the 2007-2009 financial crisis, highlights the difficulty in prosecuting crisis-related cases.
Few expected the bank to face criminal charges, but in April 2011, U.S. Senator Carl Levin asked for a criminal investigation after the subcommittee he leads spent more than a year looking into Goldman.
The accusations were aired in a heated 2010 Congressional hearing in which Levin grilled Goldman Chief Executive Lloyd Blankfein for hours about whether it was morally correct for the firm to sell its clients products described internally as “crap”.
“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the Justice Department said in a statement late on Thursday.
The DOJ does not typically make public statements when it concludes an investigation.
A statement from the Justice Department issued late on Thursday evening noted, “Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report.”
“The department and its investigative partners conducted an exhaustive review of the report and its exhibits, independently gathered and scrutinized a large volume of other documents, and tenaciously pursued potential evidentiary leads, including conducting numerous witness interviews,” the Justice Department’s statement continued. “While the department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time, we commend the hard work of those involved in preparing the report and thank the Senate’s Permanent Subcommittee on Investigations for its cooperation in regard to the criminal investigation.”
“We are pleased that this matter is behind us,” Goldman Sachs spokesman David Wells said when contacted by ABC News.
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