Criminal Probe Looks Into Goldman Trading
By SUSAN PULLIAM And EVAN PEREZ
Federal prosecutors are conducting a criminal investigation into whether Goldman Sachs GroupInc. or its employees committed securities fraud in connection with its mortgage trading, people familiar with the probe say.
The investigation from the Manhattan U.S. Attorney's Office, which is at a preliminary stage, stemmed from a referral from the Securities and Exchange Commission, these people say. The SEC recently filed civil securities-fraud charges against the big Wall Street firm and a trader in its mortgage group. Goldman and the trader say they have done nothing wrong and are fighting the civil charges.
Many criminal investigations are launched without the government filing charges. In this instance, prosecutors haven't determined whether they will bring charges in the case, said the people familiar with the matter.
The criminal probe raises the stakes for Goldman, Wall Street's most powerful firm. The investigation is centered on different evidence than the SEC's civil case, the people say. It couldn't be determined which Goldman deals are being scrutinized in the criminal investigation.
A spokesperson for the Manhattan U.S. Attorney's office declined to comment. Goldman declined comment.
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