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Carl Levin Seeking Investigation into Goldman Sachs (GS) Regarding CDOs

April 14, 2011 7:31 AM EDT
Senator Carl Levin, the chairman of the U.S. Senate panel that investigated the causes of the financial crisis, said Goldman Sachs Group Inc. (NYSE: GS) misled clients and Congress about its bets on the housing market.

Levin said he wants the Justice Department and the SEC to investigate if Goldman Sachs violated the law by not being truthful to clients that bought the complex mortgage securities known as collateralized debt obligation.

“In my judgment, Goldman clearly misled their clients and they misled the Congress," Levin said.

The market collapse that led to the 2008 financial crisis can trace its blame back to the billion of dollars banks earned by creating and selling the toxic housing debt.

“The testimony we gave was truthful and accurate and this is confirmed by the subcommittee’s own report,” Goldman Sachs spokesman Lucas van Praag said. "We did not have a massive net short position because our short positions were largely offset by our long positions, and our financial results clearly demonstrate this point."

Shares of Goldman Sachs are down 1.4 percent in pre-open trading Thursday.


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