Senate Probe: Goldman Sachs Shafted Clients, Lied to Us

Goldman Sachs may have criminally misled its clients when it sold them mortgage-backed securities without mentioning that Goldman itself would profit if they failed, the Senate’s Subcommittee on Investigations has concluded, recommending that the Justice Department and SEC consider pressing charges. The panel also recommended perjury charges against CEO Lloyd Blankfein, who they contend lied when he said under oath that Goldman had not bet against the mortgage market solely for its own profit, Bloomberg reports.

“In my judgment, Goldman clearly misled their clients and they misled the Congress,” chairman Carl Levin said at a press conference yesterday, flanked by ranking Republican Tom Coburn. The report, which concludes a two-year investigation, lays much of the blame for the financial crisis on Goldman and other firms that sold securities that exploded when the housing bubble burst, along with the credit rating agencies that enabled them. Levin also savaged the regulator overseeing many of the banks, the Office of Thrift Supervision, saying there was a "good reason" it had been abolished by Dodd-Frank. (More Carl Levin stories.)