Per commentor Argive, the Guardian reports that “Goldman Sachs [is] braced for legal battles over financial crisis“:
Goldman Sachs, the embattled investment bank, will face an array of legal claims focusing on its conduct during the financial crisis, one of Wall Street’s most feared lawyers warned last night.
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The prediction of an escalation in cases is being made by Jake Zamansky, the US attorney nicknamed “Jaws” who spearheaded the successful pursuit of the investment banks after the dotcom crash. It follows a move by Lloyd Blankfein, the chief executive of Goldman Sachs, to hire Reid Weingarten, one of America’s top criminal defence lawyers, to help him address claims that the bank misled clients in the run-up to the financial crisis and, afterwards, Congress.
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“I consider this to be a very significant event. For Lloyd Blankfein to be hiring a top criminal lawyer indicates that there may be allegations of wrongdoing forthcoming from the Department of Justice [DoJ],” Zamansky said. “Investors are asking why there have been no criminal cases against Goldman Sachs or any investment bank arising from the financial crisis. This may be a sign of more cases to come. It may be the beginning of a series of cases against Wall Street firms”. […] __
Shares in Goldman fell in late trading on Monday after Weingarten’s appointment emerged – shedding 4.7% to $104.25, their lowest level since April 2009.They had dropped again on Tuesday.
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Blankfein turned to the high profile lawyer after the DoJ began investigating the way Goldman sold subprime mortgages – the toxic investments that triggered the credit crunch. The banker has also been accused of misleading a Senate committee – a claim that is emphatically denied by Goldman. Blankfein has not been charged with any offence. Goldman itself was charged in April 2010 with defrauding investors of more than $1bn (£606m), and later paid a $550m fine. In June, the bank was served with a subpoena by the Manhattan prosecutor…
NYMag takes the blog equivalent of a victory lap:
“Nervous? What would I be nervous about?” Goldman Sachs CEO Lloyd Blankfein echoed in June, when we asked him if he was worried about the possibility that his firm might face criminal charges for its mortgage-backed securities activities. “I’m not worried that there’s any criminal activity,” said Blankfein. Nor was he concerned that he, personally, would be sent to “pound me in the ass prison,” as a source of Rolling Stone’s Matt Taibbi colorfully put it. “Do I think I’m going to be convicted of a crime? No,” he continued, a bit crossly. “I don’t think anyone really thinks I missold CDOs in mortgage desk and picked up the phone and called people and did that, so.” But it was such an odd time, we said to him. People were so angry. Wasn’t he worried about being made an example of?
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