Goldman Sachs has been subpoenaed by Manhattan prosecutors seeking details on its conduct during the financial crisis – a fresh legal front for a bank already facing federal and state inquiries, people familiar with the matter said.
The Manhattan district attorney’s inquiry follows a US Senate subcommittee report accusing the investment bank of misleading clients when it sold mortgage-linked securities just as the credit markets descended into crisis.
The Senate’s conclusions triggered a wave of investigations into Goldman’s business practices, reigniting concerns that the bank’s legal and regulatory headaches might worsen. Its shares have tumbled by 20 per cent this year.
Cyrus Vance jnr, the Manhattan district attorney whose jurisdiction includes Wall Street, is reviewing the report by the Senate subcommittee, which had referred its report to both the US justice department and the Securities and Exchange Commission, the sources said. “We don’t comment on specific regulatory or legal issues but subpoenas are a normal part of the information request process and, of course, when we receive them we co-operate fully,” Goldman Sachs said. – (Copyright The Financial Times Limited 2011)
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