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Justice Dept. Ends Investigation into Goldman Sachs Mortgage Abuses Without Pressing Charges
Think Progress / News Report
Published: Friday 10 August 2012
In a statement Thursday, Goldman said: “We are pleased that this matter is behind us.”
After a year-long investigation into Goldman Sachs, the bank singled out by a Senate investigative committee for its abusive mortgage practices in the run-up to the financial crisis, the Justice Department announced Friday that it would not press charges against the bank. Goldman Sachs became of the face of widespread mortgage fraud and abuse that led to the subprime mortgage crisis when evidence that it had made trades described by its own bankers as “shitty deals” came to light during a Senate investigation in 2011.
The Department of Justice, however, concluded that it did to meet the “burden of proof” required for charges, the Wall Street Journal reports:
“Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report,” the statement read. [...]
In a statement Thursday, Goldman said: “We are pleased that this matter is behind us.”
DOJ’s investigation began after an April 2011 report from the Senate Permanent Committee on Investigations revealed that Goldman Sachs had pushed its clients to make trades on risky mortgage-backed securities and credit default swaps even as the bank was betting the same securities would lose value. Though Goldman Sachs was “doing God’s work,” according to chief executive Lloyd Blankfein, other bankers described pushing “shitty deals” on customers. In March of this year, a Goldman Sachs trader lambasted the bank’s “toxic and destructive” culture in a scathing resignation editorial in the New York Times; a former Goldman partner followed up the next week by admitting that the bank’s “commercial animals” had duped customers and peddled “junk” to its clients.
The Securities and Exchange Commission also declined to press charges related to the bank’s role in a $1.3 billion sale of mortgage-backed securities, a reversal from last month when it indicated that it would recommend criminal prosecution. In July, Goldman settled a civil suit with the SEC for $550 million, and it faced sanctions from the Federal Reserve in September.
DOJ reserved the right to re-open the case and press charges should new evidence emerges, but for now, the case seems the latest in a string of them in which the biggest purveyors of the toxic assets that led to the financial crisis walk away with minimal penalties and, in many cases, no penalty at all.
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ABOUT Travis Waldron
Travis Waldron is a reporter/blogger for ThinkProgress.org at the Center for American Progress Action Fund. Travis grew up in Louisville, Kentucky, and holds a BA in journalism and political science from the University of Kentucky. Before coming to ThinkProgress, he worked as a press aide at the Health Information Center and as a staffer on Kentucky Attorney General Jack Conway’s 2010 Senate campaign. He also interned at National Journal’s Hotline and was a sports writer and political columnist at the Kentucky Kernel, the University of Kentucky’s daily student newspaper.
32 comments on "Justice Dept. Ends Investigation into Goldman Sachs Mortgage Abuses Without Pressing Charges"
August 11, 2012 5:51am
I used to resent Obama's choice of Geithner, but I see it now as a ploy. There's an old saying: "Keep your friends close; but keep your enemies closer." Hmmmmm.
August 11, 2012 5:39am
Travis, from reading your bio I see you have a journalism degree. Let me encourage you to "get out of class" and not just report the facts, but the implications behind the facts. I understand one runs the risk of being labeled a "nut" by inferring complicity between the DOJ and Wall Street. Wear the label proudly and write to incite change. Playing it safe and just reporting the facts is not what is needed at this juncture. For fodder, just read the rest of the comments here.
August 10, 2012 8:24pm
Is anyone surprised?Goldman is in charge.Just look at who makes all the decisions.Look where they came from.These guys pulled off the greatest scam ever and used fear and intimidation like pro's.The mafia are amateurs when it comes to pulling scams.Remember all the anger after the bailout?Neither do I.
August 11, 2012 10:02am
Occupy Wallstreet showed a bit of anger, didn't it? Although I believe they are spreading the movement to thin by demonstrating against other problems too. Focus. Focus. Focus. Besides, if anyone expects the apolitical population of this country to talk about this, much less do anything or show any anger, they are naive.
August 10, 2012 6:26pm
Too Big to fail. Too Rich to Jail. Plutocrats prevail!
Bad as things are, it is obvious that failure to vote for Obama risks a Romoney Regime! Remember that Ralph Nader effectively put Dumbya into the White House (with a little help from W's friends on the Stupreme Court).
August 11, 2012 10:23am
What did Ralph Nader do to help put Bush in the White House?
August 10, 2012 5:11pm
Surprise, surprise silly me actually had some hope for their hanging.
August 10, 2012 5:11pm
Surprise, surprise silly me actually had some hope for their hanging.
August 10, 2012 4:59pm
all comments are spot on. and sad. citizens have truly become ants. we need a plan.
August 12, 2012 7:01am
Burn Goldman Sachs out!
August 10, 2012 4:58pm
The damaged individuals are not small players. They have the resources to seek civil redress with costs and treble damages, in a forum where they only need a majority of the jurors to vote in their favor.
In the end the damaged parties should be the stockholders who were responsible for employing the scoundrels.
August 10, 2012 4:34pm
The rule of law has been off-shored. We no longer seem to have a need for it. Smoke some grass and end up behind bars. Defraud people out of millions and party in The Hamptons.
And yes, Geithner should have been thrown under the bus months ago. It may have given us some HOPE....(oops, sorry to use that word...) that Obama was serious. Sadly, Timmy still sits in his office and obfuscates....
CEOs need to know they can go to jail and be made the bitch of Bubba before any of this will change....
August 11, 2012 6:03am
Good stuff. Ditto. Let's not forget Holder getting thumped by some tires as well, not to mention the whole Bush regime you stayed in place to protect the status quo. Ludicrous.
August 10, 2012 1:25pm
Outrageous but no surprise. Wall Street funded Obama in 2008. He has been repaying them for four years, and the residual repayments are worth trillions to the oligarchs for the next four. We simply must scream bloody murder despite no choice in 2012, and we must become a force acting UPON Dems while building an independent movement allied with majority opinion. Majority opinion is more progressive than the Repub-Dem superhighway to hell, and Dems offer no exit.
August 10, 2012 1:24pm
This is just one of the reasons I cannot bring myself to vote for Obama. Of course the Republicans are screaming bloody murder about the weenie Dodd - Frank bill. Tweedle Dee and Tweedle Dumm.
Jill Stein for president!
August 10, 2012 6:12pm
Agreed. Until enough voters break the two-party stranglehold we'll have nothing but more of the same back room policies funded by the same bastards who continually pull the strings. In every revolution one man has a vision. We need lots of men (and women) to do so. Two votes for Jill Stein. Anybody reading this, may I suggest you read "The Iron Heel" by Jack London, written in 1907 and "The Jungle," written by Upton Sinclair in 1906. We're heading right back where we've been before at warp speed.
August 11, 2012 4:29am
Thanks for the recommendations.
August 10, 2012 12:55pm
Friends, we have to hold our nose and vote D. Unfortunately both alternatives are corrupt. but I am afraid the Rs are even more corrupt and on top of it have no compassion for the downtrodden
August 10, 2012 1:26pm
Oh, I plan to vote straight Democrat, except for Obama. His betrayal is right in our face.
August 10, 2012 12:15pm
'DOJ reserved the right to re-open the case and press charges should new evidence emerges'
How much evidence do these bozos need?
August 10, 2012 1:28pm
They fall far short of Bozos.
Just crooks, very like those of the "Gilded Age".
August 10, 2012 12:11pm
NO mystery here.
Obama continues to refuse to look back and criminally prosecute his thieving Wall Street "Savvy Businessmen" buddies.
Nothing good can hapeen until Obama's thieving Wall Street "Savvy Businessmen" buddies go to prsion.
August 10, 2012 12:10pm
This Obama administration is the most corrupt criminal government in history!!
August 10, 2012 1:31pm
How can you say that after the Dubya Bush Administration? At least Obama didn't lie us into a trillion dollar war based on manufactured intelligence. Maybe Obama's is the second most corrupt Administration.
August 10, 2012 11:28am
First of all, NATION OF CHANGE needs to do a better job editing this article, i.e., "Goldman Sachs became of the face of" and "concluded that it did to meet". As for the subject of the story, it is a huge disappointment. Justice is not being served and is broken--which is even sadder because the administrative side of our government is failing us, too. I would like a DO Over but feel like we are all being thrown under the bus.
August 10, 2012 11:22am
This is the most serious failing of the Obama administration to date and can be laid at the feet of Geithner the worst advisor and inside man for the financial industry. This is the reason I will not vote again for Obama, not that Romenyhood isn't even worse.
August 10, 2012 11:30am
I agree. Been outraged by the Geitner appointment from the beginning. And this just makes my blood boil. Not sure what I will do come election day. I see no good options.
August 10, 2012 11:42am
Join the club Pam. I like Gerald Celente's idea, no one vote to protest the lack of any acceptable candidates. That government propaganda machine called the Main Stream Media call hardley avoid printing that story on November 7 !
August 11, 2012 10:32am
But if no one votes, isn't that even better for those who are running for office, and especially those who control those who run for office? I mean, apathy and just plain giving up is playing directly into their hands, because then, they wouldn't have any oppositon to their dirty deeds at all.
August 10, 2012 11:21am
I guess they finally got the memo!
August 10, 2012 10:44am
As usual,big money rules. Our government has become a joke; run now by money and corporations. Pathetic!
August 10, 2012 11:33am
How can you say that, not everything is corrupted. The banker's friends who are serving in Congress were totally warned away from those toxic investments. The bankers are not stupid, they would never sting the federal cops who held the door open for them !