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Prosecutors 'ask Goldman Sachs to explain behaviour' | Prosecutors 'ask Goldman Sachs to explain behaviour' |
(about 2 hours later) | |
New York prosecutors have asked Goldman Sachs to explain its behaviour in the run-up to the financial crisis, according to several news agencies. | New York prosecutors have asked Goldman Sachs to explain its behaviour in the run-up to the financial crisis, according to several news agencies. |
They quote sources saying that the investment bank received a subpoena from the Manhattan district attorney. | They quote sources saying that the investment bank received a subpoena from the Manhattan district attorney. |
Goldman is also being investigated by the Securities and Exchange Commission (SEC) and the Justice Department. | |
An April Senate report said Goldman had encouraged investors to buy mortgage-based products it knew would fail. | An April Senate report said Goldman had encouraged investors to buy mortgage-based products it knew would fail. |
The report said that Goldman had shifted risk from its own balance sheet onto investors, while deceiving them about the bank's own positions. | The report said that Goldman had shifted risk from its own balance sheet onto investors, while deceiving them about the bank's own positions. |
A Goldman Sachs spokesman said that the company always cooperated with subpoenas but would not comment on specific legal issues. | |
Goldman Sachs shares ended the day down 1.3% and have fallen by 20% so far this year. | |
The request for information is an early stage in an investigation, but it does not necessarily mean that any charges will be filed. | |
Goldman Sachs agreed to pay $550m (£336m) last summer to settle civil fraud charges from the SEC, which claimed it had misled buyers of mortgage-related securities. | |
Goldman did not admit to breaking the law, although it conceded that some information had been left out of the information provided to buyers. |
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