Legal News

Goldman Sachs has mounting legal woes

By (Legal News)

Goldman Sachs' legal headaches don't start and end with the Securities and Exchange Commission.

Reports surfaced late Thursday that federal prosecutors have opened a criminal investigation into Goldman and its employees, over whether it may have committed securities fraud in its mortgage trading operations.

A representative for the firm would not confirm reports of an inquiry, but said they were not surprised given the scrutiny the firm has endured in recent weeks, adding they would cooperate with any requests for information.

The latest legal action builds on the high-profile civil case brought against the company last month by the SEC, in which the agency charged the firm and one of its employees with defrauding investors in the sale of securities tied to subprime mortgages.

In many ways, the agency's case has become a game changer for Goldman. Not only has it tarnished the gilded reputation of Wall Street's top firm, it also exposed the company to series of new legal attacks across a number of fronts.

Since the SEC announcement, top German and British officials, including UK Prime Minister Gordon Brown, have demanded investigations into the firm's dealings, opening the door to additional regulatory probes.

Full post as published by Legal News Post on May 03, 2010 (boomark / email).