{"id":5215,"date":"2011-08-24T00:00:00","date_gmt":"2011-08-24T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/08\/goldman_sachs_ceo_hires_promin"},"modified":"2022-04-05T11:26:32","modified_gmt":"2022-04-05T16:26:32","slug":"goldman-sachs-ceo-hires-promin","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/goldman-sachs-ceo-hires-promin\/","title":{"rendered":"Goldman Sachs CEO Hires Prominent Defense Attorney in the Wake of Justice Department Probe into Mortgage-Backed Securities"},"content":{"rendered":"<p>Now that the Justice Department is investigating Goldman Sachs (GS), Lloyd C. Blankfein, the broker-dealer\u2019s chief executive, has retained the services of a prominent defense attorney. This move comes following allegations by the Senate Permanent Subcommittee on Investigations accusing firm executives of misleading investors and Congress about mortgage-backed securities. News of Reid Weingarten\u2019s hiring  caused Goldman Sachs\u2019 shares to drop almost 5%. On Tuesday, Goldman Sachs lost almost $2.7 billion in market value.<\/p>\n<p>The Senate panel issued a report claiming that Goldman Sachs  misled investors when it failed to disclose that it was betting against securities that they were buying from the financial firm. The report also accuses the financial firm\u2019s CEO of lying under oath when making the claim that the financial firm did not have a massive short position against the housing market. <\/p>\n<p>Weingarten is a leading criminal defense attorney  at Steptoe &amp; Johnson. He previously represented ex-Enron accounting officer Richard Causey, ex-WorldCom chief executive Bernard Ebbers, ex-Duane Reade chief executive Anthony Cuity, and ex-Tyco International general counsel Mark Belnick.<\/p>\n<p>The senate panel\u2019s report, which is 639 pages long, comes after a 2-year bipartisan investigation. The subcommittee found that traders and executives tried to eliminate their exposure to the subprime mortgage market while shorting the market to make a profit. <\/p>\n<p>The panel accused Goldman of misleading clients when it didn\u2019t tell them that it was betting or shorting against their investments. In 2007, Goldman\u2019s mortgage department made a $1.2 billion profit.<\/p>\n<p>Goldman Sachs\u2019s latest quarterly filing with the SEC reveals that  the financial is under scrutiny for a number of issues, including its role as  a clearing broker and its compliance with the US Foreign Corrupt Practices Act. The investment bank is also  be under investigation at the state, federal, and local levels and is the recipient of subpoenas. In 2010, Goldman Sachs agreed to settle for $550 million charges by the SEC that it misled clients about a synthetic collateralized debt obligation (CDO) when the housing market was collapsing.<\/p>\n<p>Recently, Allstate (ALL) sued Goldman Sachs Group for the over $123 million in MBS that it says that the financial firm fraudulently sold it. Allstate claims that Goldman issued misstatements and made omissions about the mortgages. The National Credit Union Administration also just filed its securities fraud case seeking $491 million from Goldman for the purchase of more than $1.2 billion in MBS sales. NCUA blames Goldman and other financial firms, including <a href=\"https:\/\/www.investorlawyers.com\/jp-morgan-chase-background-information.html\">JPMorgan <\/a>and RBS Securities, for the failure of five wholesale credit unions. NCUA says that because of the way Goldman handled the mortgage-backed securities sales, the credit unions did not know they were taking on such huge risks when they made those investments. <\/p>\n<p>Why Goldman Investors Are Overreacting, New York Times, August 23, 2011<\/p>\n<p><a href=\"https:\/\/www.efinancialnews.com\/story\/2011-08-23\/goldman-outside-lawyers\">Goldman confirms Blankfein and other execs hired outside lawyers<\/a>, Efinancial News,  August 23, 2011<\/p>\n<p><strong><br \/>\nMore Blog Posts:<\/strong><br \/>\n<a href=\"https:\/\/www.investorlawyers.com\/blog\/ncuas-sues-goldman-sachs-for-4\/\">NCUA\u2019s Sues Goldman Sachs for $491M Over $1.2B of Mortgage-Back Securities Sales That Caused Credit Unions\u2019 Failure<\/a>, Institutional Investor Securities Blog, August 23, 2011<\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2010\/07\/goldman_sachs_settles_sec_subp_1\">Goldman Sachs Settles SEC Subprime Mortgage-CDO Related Charges for $550 Million<\/a>, Stockbroker Fraud Blog, July 30, 2010 <\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/goldman-sachs-group-made-money-1\/\">Goldman Sachs Group Made Money From Financial Crisis When it Bet Against the Subprime Mortgage Market, Says US Senate Panel<\/a>, Institutional Investors Securities Blog, April 15, 2011<\/p>\n<p>\n<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/goldman-sachs-ceo-hires-promin\/#more-5215\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Now that the Justice Department is investigating Goldman Sachs (GS), Lloyd C. Blankfein, the broker-dealer\u2019s chief executive, has retained the services of a prominent defense attorney. This move comes following allegations by the Senate Permanent Subcommittee on Investigations accusing firm executives of misleading investors and Congress about mortgage-backed securities. News of Reid Weingarten\u2019s hiring caused [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3947,3757],"tags":[],"class_list":["post-5215","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-goldman-sachs","category-mortgagebacked-securities"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Goldman Sachs CEO Hires Prominent Defense Attorney in the Wake of Justice Department Probe into Mortgage-Backed Securities &#8212; Investor Lawyers Blog &#8212; August 24, 2011<\/title>\n<meta name=\"description\" content=\"Now that the Justice Department is investigating Goldman Sachs (GS), Lloyd C. 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