According to various news sources, the U.S. panel investigating the causes of the financial crisis issued a subpoena to Goldman Sachs Group Inc. after the Wall Street firm failed to hand over documents in a timely manner.
The Financial Crisis Inquiry Commission has made it clear that it is committed to using its subpoena power if firms under review don’t comply with information requests.
The request for information shows the FCIC is turning attention to the most profitable firm in Wall Street history after investigating credit-rating companies and banks such as Citigroup Inc. and Bear Stearns Cos. Goldman Sachs has already drawn scrutiny from regulators and lawmakers for packaging mortgages into securities that triggered losses for investors when the housing market collapsed in 2007.
This request followed fraud charges brought by the Securities and Exchange Commission against Goldman Sachs. The SEC sued New York-based Goldman Sachs April 16, accusing the firm of selling a collateralized debt obligation tied to mortgages without disclosing to investors that hedge fund Paulson & Co. helped pick the underlying securities. Paulson was betting the CDO would fail.
Goldman Sachs denied charges stating that the suit is unfounded in law and fact.
Federal prosecutors in New York are also investigating transactions by Goldman Sachs to determine whether to bring charges. The firm hasn’t been accused of criminal misconduct.
