Levin says Goldman Sachs misled Congress
JEREMY HOBSON: A new bipartisan Senate report has some fresh evidence of what some of the big banks did as the housing bubble popped. And afterwards. And one of those banks — Goldman Sachs — is being accused of misleading Congressional investigators.
Marketplace’s Alisa Roth joins us live from New York with more on this. Good morning.
ALISA ROTH: Good morning.
HOBSON: Well, tell us what this report says.
ROTH: The committee looked at almost 6,000 pages of emails and other documents from banks like Washington Mutual, Goldman Sachs as you said and Deutsche Bank. There doesn’t seem to be evidence of out and out fraud. But the report makes it clear the banks were looking to profit from the booming real estate market and then rushing to figure out how to survive its collapsed. Goldman Sachs is a centerpiece of the report.
Democratic Senator Carl Levin, one of the two senators to sign off on the report, wants the Justice Department to look into whether Goldman misled clients. And he says federal prosecutors should think about bringing perjury charges against Goldman executives for telling Congress the bank didn’t bet against the housing market and against its own clients to make money.
CARL LEVIN: Why would Goldman deny what is so obvious? That they were engaged in a huge short in the year 2007? Why would they deny it? Because they gained at the expense of their clients.
And, by the way, unlike some earlier investigations into the financial crisis, this one was really bipartisan. Tom Coburn, the Republican Senator from Oklahoma also signed off on it.
HOBSON: And is the report recommending any solutions?
ROTH: It is. Some of these have been taken care of by Wall Street reforms in places like the Dodd-Frank bill. But the Senate panel also suggests that regulators should look for legal violations in mortgage related securities to be sure that they’re not breaking any laws. And that we should consider how risky lending practices could affect the financial system as a whole.
HOBSON: Marketplace’s Alisa Roth in New York, thanks.
ROTH: You’re welcome.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
