Goldman Sachs Subpoenaed in Fraud Probe

Senate seeks evidence that banks foresaw mortgage meltdown
By Jason Farago,  Newser Staff
Posted Jul 30, 2009 6:38 AM CDT
Goldman Sachs headquarters in New York. Goldman has been subpoenaed by a Senate subcommittee in connection with mortgage-backed securities fraud.   (AP Photo/ Louis Lanzano)
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(Newser) – A Senate committee has subpoenaed Goldman Sachs, Deutsche Bank, and other financial institutions as part of an investigation into mortgage-market fraud, sources tell the Wall Street Journal. The probe appears to focus on emails and other internal communications that may show bankers' doubts about the safety of mortgage-backed securities, which collapsed in value last fall and helped trigger the financial crisis.

The subpoena by the Senate Permanent Subcommittee on Investigations, headed by Michigan Democrat Carl Levin, is only the latest broadside against Goldman Sachs on Capitol Hill. Earlier this week 10 members of Congress wrote to Ben Bernanke to ask whether Goldman needs more regulation and less government aid. And health care reformers are debating what they call a "Goldman Sachs tax" after its execs' cushy insurance plans.