The U.S. Justice Department has announced that it will not be prosecuting Wall Street firm Goldman Sachs or its employees following an investigation into financial fraud. A Senate panel had been investigating allegations that Goldman marketed four sets of risky mortgage securities without informing their clients that the securities were risky.
The Senate panel, chaired by Senator Carl Levin (D-Mich.), asserts that Goldman Sachs bet against investors’ positions and tricked investors about those positions in order to shift the risk.
According to the Justice Department, officials “have determined that, 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” from the Senate subcommittee.
The statement continued, “The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time.”
Despite the DOJ’s assertions that there is not enough evidence to bring a criminal prosecution against Goldman Sachs, Goldman Sachs agreed to pay $550 million in civil fraud charges after the SEC determined that the company had in fact misled its investors. That agreement applied to one of the four deals that were being investigated by the Senate subcommittee. And Goldman employee Fabrice Tourre is still facing a civil complaint from the SEC.
The DOJ did add that the decision could change if new evidence were to emerge. “If any additional or new evidence emerges, today’s assessment does not prevent the department from reviewing such evidence and making a different determination, if warranted,” the statement said.
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