Criminal Probe in Goldman Case Reportedly Began Before SEC Suit
Updated: Prosecutors have begun a criminal investigation of Goldman Sachs, several newspapers are reporting.
Initial reports indicated the Securities and Exchange Commission had referred its civil case to the Justice Department for a criminal probe, but the Washington Post now says an investigation by the U.S. Attorney’s office in Manhattan was under way before the SEC announced its case.
The criminal investigation involves different evidence than in the SEC’s case alleging the investment bank sold a mortgage investment that was designed to fail, the Wall Street Journal reported in its story on the criminal probe. The Post, however, says it’s not clear whether prosecutors are investigating different transactions than those cited in the civil case.
If prosecutors bring criminal charges, they will have to overcome a tough hurdle, showing Goldman or its employees knowingly committed fraud, the Wall Street Journal says says. Other obstacles include a higher burden of proof and complex evidence.
The New York Times also has a story. All the articles rely on anonymous sources.
Updated at 12:20 p.m. to include Washington Post report that the probe was underway before the SEC filed its civil suit against Goldman.
