SEC Sends Goldman Case To PROSECUTORS

[Segami]

" The Securities and Exchange Commission has referred its investigation of Goldman Sachs to the Justice Department for possible criminal prosecution, less than two weeks after filing a civil securities fraud case against the firm, according to a source familiar with the matter.


Any probe by the Justice Department would be in a preliminary stage. No Goldman Sachs employees involved in the mortgage-related transactions that are the focus of the SEC case have been interviewed by Justice Department prosecutors or the FBI agents who often conduct probes on behalf of prosecutors, according to a source familiar with the matter. The sources spoke on condition of anonymity because they were not authorized to discuss the matter publicly.


The Justice Department usually investigates high-profile cases of securities fraud, but the threshold from criminal prosecution is significantly higher than that of civil cases. The SEC only files civil cases.


The Wall Street Journal and Bloomberg News reported Thursday night that the U.S. Attorney's Office in Manhattan had followed up on the request and opened a criminal probe. The office declined to comment.


"Given the recent focus on the firm, we're not surprised by the report of an inquiry," said Goldman spokesman Lucas Van Praag. "We would cooperate fully with any request for information."


It is very rare for the government to indict a firm, and the mere threat of criminal prosecution can destroy a company. A criminal investigation destroyed the infamous Wall Street firm Drexel Burnham Lambert in the 1980s even though the firm settled with authorities.


And although the Supreme Court ultimately overturned the conviction, accounting firm Arthur Andersen collapsed after facing criminal charges in connection with the Enron corporate corruption in the early 2002.


The SEC claims the firm and an employee named Fabrice Tourre broke the law and committed fraud when they sold clients a complex investment linked to the value of home loans that was secretly designed to fail. Another firm, Paulson & Co., a hedge fund, helped Goldman create the investment and planned to bet against it. But the SEC claims that relationship was not disclosed to Goldman's clients, ACA Financial Guaranty and the German bank IKB.


more


http://www.washingtonpost.com/wp-dyn/content/article/2010/04/29/AR2010042904458.html

[dixiegrrrrl]

1. Do we dare hope?

[Segami]

4. Dixie, ' hope ' is a good thing to have and one never knows where the opening doors

along the way will take you especially since this case is beginning to morph from a civil charge to a possible criminal charge(s). Any out-of-nowhere surprise incriminating evidence might shake a few scared souls into cutting an immunity deal in exchange for cooperation. Thats an old effective tactic prosecutors use to squeeeeeeze lower mob minions. Cut the deal boys!

[wildbilln864]

2. who will the scapegoats be?

:shrug:

[Bluebear]

3. Well that's shitty news, idn't it, Goldman Sachs?