Wednesday, September 7, 2011

New York prosecutors widen Goldman probe - WSJ

NEW YORK: New York prosecutors are widening their probe into the manner in which Goldman Sachs marketed certain mortgage-linked securities before the financial crisis, the Wall Street Journal reported, citing people familiar with the matter.

The Manhattan district attorney's office began its probe into Goldman following the release in April of a U.S. Senate subcommittee report into the causes of the financial crisis, the paper said.

The district attorney's office has issued subpoenas to Morgan Stanley and other investors in the deals. The prosecutor's requests to investors, including some hedge funds, concerned how Goldman sold the deals, the Journal said.

Subpoenas do not indicate any wrongdoing. They are formal requests for information and do not necessarily mean that charges are forthcoming or likely.

A spokeswoman for the district attorney's office and a Goldman spokesman declined to comment to the Journal. Both could not immediately be reached for comment by Reuters outside regular U.S. business hours. ' Reuters


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