Feds Launch Criminal Investigation into Goldman Sachs's Mortgage Securities Dealings

Now, The US Attorney's Office is conducting a criminal investigation over their mortgage deals. The Wall Street Journal was first to report that the US Attorney's Office in Manhattan was looking at the investment house's mortgage securities deals. Those deals had attracted a civil suit by the Securities and Exchange Commission. The Journal's source said the investigation stemmed from a criminal referral by the SEC, and came just days after 62 House lawmakers asked the Justice Department for a criminal probe. CBS News Business Correspondent Rebecca Jarvis said it was to be expected. "We know that often times, these types of investigations that become civil in the first place, turn into criminal investigations down the road," said Jarvis. A Goldman Sachs spokesman downplayed its importance and said they were not surprised by the report of an inquiry due to the recent focus on the firm. He added that they would cooperate fully with any request for information. The standard for any criminal conviction is much higher than a civil one. "Prosecutors must show that there was an intention to commit fraud. Not simply that this business, that Goldman Sachs, accidentally committed fraud in terms of trying to protect itself from mortgage securities and the housing crisis. So the burden of proof here is high," said Jarvis. The issue in all of the investigations is whether Goldman Sachs knowingly bet against its own investors on mortgage securities. Time will tell what these ...



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