(Bloomberg News) The Justice Department is reviewing a report by a U.S. Senate panel that said Goldman Sachs Group Inc. misled clients about the firm's bets on securities tied to the housing market, according to Attorney General Eric Holder.
Holder told the House Judiciary Committee at a hearing today that the department is reviewing the April report by the Senate Permanent Subcommittee on Investigations, led by Senator Carl Levin, a Michigan Democrat. Holder didn't say which aspects of the report, which probed the causes of 2008 financial crisis, are under review.
"The department is looking right now at the report prepared by Senator Levin's subcommittee that deals with Goldman Sachs," Holder said in Washington.
At the time the report was released, Levin said he wanted the Justice Department and the Securities and Exchange Commission to examine 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.
Levin also said federal prosecutors should review whether to bring perjury charges against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other current and former employees who testified to Congress last year. Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue.
'Truthful And Accurate'
In a statement when the report was released, New York-based Goldman Sachs denied it had misled anyone about its activities.
"The testimony we gave was truthful and accurate and this is confirmed by the subcommittee's own report," Goldman Sachs spokesman Lucas van Praag said.
David Wells, a spokesman for Goldman, declined to make any additional comment today.
Much of the blame for the market collapse belongs to banks that earned billions of dollars in profits creating and selling financial products that imploded along with the housing market, according to the report. The Senate panel levied its harshest criticism at investment banks, in particular accusing Goldman Sachs and Deutsche Bank AG of selling collateralized debt obligations backed by risky loans that the banks' own traders believed were likely to lose value.