Obama Administration Let’s Goldman Sachs Off the Hook, Ends Investigations

The Obama administration has ended two investigations into the actions of Goldman Sachs during the financial crisis, allowing the bank to escape any responsibility for it’s role in the near collapse of the US economy.

The Justice Department released a statement Thursday claiming that there was “no viable basis to bring a criminal prosecution” against Goldman or its employees after a Congressional committee asked prosecutors to investigate several of the mortgage bank’s deals.

The Senate’s Permanent Subcommittee on Investigations examined mortgage securities that Goldman sold to investors, who later sustained steep losses during the economic crisis. The subcommittee also suggested prosecutors investigate whether the chief executive of the bank, Lloyd Blankfein, lied to lawmakers during public testimony.

The Securities and Exchange Commission also ended an investigation, on Thursday, into a $1.3 billion subprime mortgage deal, taking no action. The move was a complete about face for the commission, which notified the bank in February that it planned to pursue a civil action.

“We are pleased that this matter is behind us,” a bank spokesman said.

The only law enforcement case to have surfaced against Goldman was a civil case that the bank settled for $550 million in 2010 over a mortgage investment that investigators said had been intended to collapse.

After President Obama announced the creation of a special task force in January to investigate the mortgage melt down, the S.E.C. and other authorities claimed to hold the banks accountable. Wall Street, after all, had packaged and sold subprime mortgages not only to investors but to the government-owned, tax payer backed mortgage finance giants Fannie Mae and Freddie Mac.

Billions of dollars were lost.

 

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