April 14th, 2011
10:00 AM ET

Goldman blasted for conflicts of interest

Ben Rooney
CNNMoney.com Staff Reporter

NEW YORK (CNNMoney) - A Senate panel issued a scathing report Wednesday that describes Goldman Sachs as a "case study" of the recklessness and greed on Wall Street that set off the 2008 financial crisis.

The 600-page report also blames the lending practices of big commercial banks, such as the now-defunct Washington Mutual, for plunging the U.S. economy into a painful recession.

The regulators who failed to crack down on the banks, including the Office of Thrift Supervision, are faulted for their cozy relationship with Wall Street, as are the major credit rating agencies, Moody's and Standard & Poor's.

"Our investigation found a financial snake pit rife with greed, conflicts of interest, and wrongdoing," said Senator Carl Levin, chairman of the Senate subcommittee charged with investigating the causes of the financial crisis.

The subcommittee, which spent two years on the investigation, based its report on thousands of internal company documents and emails, as well as hundreds of interviews and Congressional testimony.

The subcommittee singled out Goldman (GS, Fortune 500) and Deutsche Bank (DB) as examples of Wall Street firms that reaped huge profits by marketing securities backed by subprime mortgages as safe investments to clients, even as the banks bet against these very same securities.

Full story on CNNMoney.com

Filed under: 360° Radar • Wall St.
soundoff (8 Responses)
  1. Jorge C. Aguiniga, Esq.

    Anderson: You've done it again to keep them honest! Since reading "The Great American Stick Up", I was wondering who was finally going to let the cat out of the bag. Now perhaps the collusion between the White House and Wall Street which goes back several administrations will get the attention and legal prosecution it deserves.

    April 15, 2011 at 12:20 am |
  2. sandra salai

    Goldman Sachs is the most deceptive, corrupt, group of greedy thugs too grace Wall Street. Their illegal gains are honest, hard working people's losses. They are pure pick pockets. Their wealth is the result of pure deception...not brilliant fund management . They have destroyed America's pension funds, looted investors, insured their fraud and must be held accountable. Is anyone listening out there.........................

    April 14, 2011 at 11:47 pm |
  3. Melanie Cuneo

    Anderson, Please stay on this Goldman Sachs/
    Wall Street story. Matt Taibi is right, a few of these criminals need to do prison time. I applaud Eliot Spitzer in calling for the resignation of the Attorney General. The entire nation suffered on countless levels, do not let them get away with this.

    April 14, 2011 at 11:45 pm |
  4. chad

    The mortage back securities were sold to people that actually knew what they were getting. These were not sold to the average joe on the street. Also it's the same thing as a person selling their stock on the open market in one of these crappy banks in early 2008 and knowing that the bank was crappy and turning around and short selling the same crappy bank the next day. Then shouldn't these people also be sent to jail?

    April 14, 2011 at 11:35 pm |
  5. Giovanna Darco

    At least we know that one senator has the testicular fortitude to call out the men "who work for God." These Goldman Sachs suits are worse than "The Teflon Don" John Gotti himself, because they are organized crime with the law on their side.
    Great to see Eliot Spitzer's talents being utilized and Matt Taibi is a joy.
    I believe France's President Sarkozy also had the balls to recently call out another over-inflated banker, Jaime Diamon after he mistakenly stated at a luncheon that "bankers are tired of taking the rap for the economic crisis and we should move on..." Sarkozy reminded him to take responsibility because the banks caused the entire financial system to nearly collapse totally. Vive la France!

    April 14, 2011 at 11:35 pm |
  6. sandra salai

    Goldman Sachs are guilty as sin and i want justice..........this could be Obama's demise if this goes unpunished!!!!!

    April 14, 2011 at 11:24 pm |
  7. Bruce Hixon

    I hope you at CNN keep this story up front so the people can hear about it and get angry also. More detail on all involved would be great. Yes, we need change, but we need to focus on the real problems like the scamming of America by large industries, the supreme court and the wealthy. I hope they don't change my tax rate until they fix GE's! Thank you!

    April 14, 2011 at 11:23 pm |
  8. Global Roamer

    Thank you, CNN, for airing this. I'm angry that more mainstream media isn't shouting about this from every headline and news program. The Rolling Stone article makes Glen Beck conspiracy theories look mild in comparison.

    April 14, 2011 at 10:26 pm |