DOJ won't bring criminal charges against Goldman Sachs


On the heels of the news that the SEC would not pursue charges against Goldman Sachs after looking into the Fremont Home Loan Trust 2006-E CDO, the Justice Department has said that it too will not seek a criminal indictment against the bank.

Recall that an investigation by the Senate's Permanent Subcommittee on Investigations found that Goldman Sachs "designed, marketed, and sold CDOs in ways that created conflicts of interest with the firm's clients and at times led to the bank's profiting from the same products that caused substantial losses for its clients."

The investigative report was referred to the DOJ along with a recommendation by two senators that executives at Goldman Sachs, including CEO Lloyd Blankfein, should be investigated for perjury, pursuant to their testimony in a hearing before the subcommittee.

"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," Justice said in a statement.

"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."

This will stoke more criticism from bank critics who contend that prosecutors have let banks get away with massive crimes, but it is undoubtedly good news for Goldman Sachs and Blankfein. This is one more small step on the path toward an eventual transition at the top.

For more:
- here's an article from ABC News

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Goldman Sachs: No CDO charges by SEC