U.S. starts criminal probe into Goldman trading: report (updated)

[ProSense]

U.S. starts criminal probe into Goldman trading: report

NEW YORK (Reuters) – U.S. federal prosecutors are conducting a criminal probe into whether Goldman Sachs Group Inc (GS.N) or its employees committed securities fraud in connection with its mortgage trading, the Wall Street Journal reported on its website on Thursday.

The investigation from the Manhattan U.S. Attorney's Office, which is at a preliminary stage, stemmed from a referral from the U.S. Securities and Exchange Commission, the WSJ said, citing people familiar with the probe.

The SEC already has filed a civil fraud lawsuit against Goldman, charging that it hid vital information from investors about a mortgage-related security.

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The criminal investigation is centered on different evidence than the SEC's civil case, according to the Journal, adding that it could not be determined which Goldman deals are being scrutinized in the investigation.

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Updated to add:

SEC sends Goldman case to prosecutors

By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, April 29, 2010; 8:25 PM

The Securities and Exchange Commission has referred its investigation of Goldman Sachs to the Justice Department for possible criminal prosecution, less than two weeks after filing a civil securities fraud case against the firm, according to a source familiar with the matter.

Any probe by the Justice Department would be in a preliminary stage. No Goldman Sachs employees involved in the mortgage-related transactions that are the focus of the SEC case have been interviewed by Justice Department prosecutors or the FBI agents who often conduct probes on behalf of prosecutors, according to a source familiar with the matter. The sources spoke on condition of anonymity because they were not authorized to discuss the matter publicly.

The Justice Department usually investigates high-profile cases of securities fraud, but the threshold from criminal prosecution is significantly higher than that of civil cases. The SEC only files civil cases.

The Wall Street Journal and Bloomberg News reported Thursday night that the U.S. Attorney's Office in Manhattan had followed up on the request and opened a criminal probe. The office declined to comment.

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[ProSense]

1. No comment? n/t

[Jennicut]

2. But...I thought Obama was owned by Goldman Sachs!

And anyone associated with him.

[NavyMom]

3. I hope they did not spend all their ill gotten bonuses..nt

[AtomicKitten]

4. Great news.

A crawl on CNN read: Goldman-Sachs: We did nothing wrong.

:puke:

There is some discussion going on as to whether laws were bent but not broken. I'm sure GS will lawyer up and fight it. America needs to see some justice served up on this.