Fiscal Scandals: Goldman Sachs May Have Misled Investors, Banks Investigated for Collusion
At this point, news of big banks engaging in illegal and unethical activities is no real shocker, but that doesn't make it any less infuriating. And today, there are not one but two gems for you to gnaw on, via Daily Beast.
First, a two-year Senate Panel inquiry into Goldman Sachs has shown the firm may have misled both Congress and investors about housing market securities. Senator Carl Levin, D-MI, wants the Justice Department and the SEC to investigate 'whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value,' reports Bloomberg.
Last year, Sachs employees -- including CEO Lloyd Blankfein -- testified under oath that Goldman Sachs did not bet against the mortgage market for profit -- and if the probe finds otherwise, they could be indicted for perjury, as well. “In my judgment,” said Senator Levin in a press briefing, “Goldman clearly misled their clients and they misled the Congress.”
And in a separate matter, US investigators are looking into whether big banks worked together to alter interest rates during the financial crisis, reports the WSJ. The DoJ and the SEC suspect institutions such as Bank of America and Citigroup colluded to manipulate the London Interbank Offered Rate (Libor), by understating their borrowing costs and keeping the global loan rate artificially low -- knowingly affecting trillions of dollars around the world and putting global finances in peril.
And if you want to get madder, there's also this.