US Justice Department drops Goldman financial crisis probe
The US 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.
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, US 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 last night.