Shares of Goldman Sachs (GS) are down $5.81, or almost 4%, at $154.43, after Susan Pulliam and Evan Perez of The Wall Street Journal reported last night that the Manhattan U.S. Attorney’s office is investigating the possibility of criminal fraud charges against Goldman, on top of the civil fraud charges brought by the SEC, citing “people familiar with the probe.”
The U.S. attorney has not yet decided whether to bring charges, they write, and the evidence in these potential charges is said to be different from the incriminating emails that have been widely circulated in the SEC case. Pulliam and Perez note that no firm on Wall Street has survived criminal charges, citing the cases of E.F. Hutton and Drexel in the 1980s.
The Times’s Louise Story and Michael J. de la Merced follow up with a fairly similar piece, noting in addition the difficulty of proving criminal intent to fraud, as in the Bear Stearns case that prosecutors lost last year.
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