REUTERS-

Goldman Sachs Chief Executive Lloyd Blankfein has hired Reid Weingarten, a high-profile Washington defense attorney whose past clients include a former Enron accounting officer, according to a government source familiar with the matter.

[REUTERS]

Then shortly after from Bloomberg–

Goldman Drops on Report Blankfein Hired Lawyer

MATT TAIBBI-

Just a quick note about the “Shredded Justice” story, as I’ve had a couple of questions about some of the SEC’s responses to the story.

Several readers pointed to this story in which SEC spokesman John Nester said this:

“We do keep records of our MUI’s and they’re available to our investigators to learn about previous work on matters that have been reviewed.”

[ROLLINGSTONE]

A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation’s worst financial criminals.

Rollingstone-

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – “Hey, chief, didja know this guy had two wives die falling down the stairs?” No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

[ROLLINGSTONE]

Market Watch-

WASHINGTON (MarketWatch) — The Securities and Exchange Commission may have destroyed documents and compromised enforcement cases involving activity at large banks and hedge funds during the height of the financial crisis in 2008, according to allegations made by a lawmaker on Wednesday.

[MARKET WATCH]

[ipaper docId=62540112 access_key=key-wotv5tiw8imq9xbpkk9 height=600 width=600 /]

All of this goes to a simple point: safety-and-soundness regulation is fundamentally incompatible with law enforcement. Prudential regulators aren’t interested in law enforcement.  They’re interested in preserving quiet and stability and that sometimes means papering over problems and looking the other way.

Prof. Adam Levitin–

Over the past couple of years, the Massachusetts Attorney General’s office has reached settlements with a number of major banks regarding mortgage securitization. These settlements has received very little notice in the press, but I think they provide a real template for future AG settlements and are worth examining.

Continue reading [CREDIT SLIPS]

According to documents filed recently with the House Clerk, Issa went on a buying spree of high yield Goldman Sachs bonds at the same time he was running defense for the investment bank in Congress.

ThinkProgress-

Oversight Committee Chairman Rep. Darrell Issa (R-CA) raised hell last year to stop the federal government from investigating Goldman Sachs regarding allegations that the company defrauded investors. In April 2010, shortly after the Securities and Exchange Commission (SEC) announced a civil suit against Goldman Sachs, Issa sent a letter to SEC Chairwoman Mary Schapiro demanding to know if there was “any sort of prearrangement, coordination, direction from, or advance notice” between the SEC and the Obama administration or congressional Democrats over the timing of the lawsuit.

Continue reading [THINKPROGRESS]

Just recently it was announced that the NY Fed is probing Goldman Sachs mortgage servicing unit Litton Loan Servicing

BLOOMBERG-

Goldman Sachs Group Inc. (GS) agreed to sell Litton Loan Servicing LP to Ocwen Financial Corp. (OCN) for $263.7 million in cash, ending the New York-based bank’s 3-1/2 year experiment in processing home-loan payments.

In addition to the cash payment, which may be adjusted at closing, Ocwen will pay about $337.4 million to retire some of Litton’s debt, according to a filing by West Palm Beach, Florida-based Ocwen. The sale of Litton comes two months after Goldman Sachs wrote down the value of the mortgage-servicing business by about $200 million.

BLOOMBERG:

Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, received a subpoena from the Manhattan District Attorney’s office seeking information on the firm’s activities leading into the credit crisis, according to two people familiar with the matter.

Just last week Chicago AG Lisa Madigan announced she was probing them as well. Note: some mistakenly say “National” instead of “Nationwide” below…

NY POST-

Indeed, New York State Attorney General Eric Schneiderman recently said that his office is probing mortgage processing firm Lender Processing Services and National Title Clearing.

Schneiderman also launched a probe into the mortgage securitization practices of major investment banks Goldman Sachs, Morgan Stanley, Deutsche Bank and UBS.

Federal Reserve Lending Revelations Intensify Criticism Of Central Bank’s Secrecy

HuffPO-

In the midst of the global financial crisis in 2008, the Federal Reserve lent Goldman Sachs, Credit Suisse and Royal Bank of Scotland at least $30 billion each at interest rates as low as 0.01 percent with no public disclosure of the details, Bloomberg News reported on Thursday.

The latest revelations about the covert infusions of credit provided by the Fed to some of the world’s largest banks has amplified accusations that the central bank is a power unto itself, operating according to its own devices and in the interest of major financial institutions — and beyond accountability to taxpayers.

“It just points out that this was about secrecy to protect banks basically from embarrassment from transparency, which is not supposed to be what the Fed’s about,” said Dean Baker, co-director of the Center for Economic Policy and Research, in Washington.

“That is the fundamental problem with the Fed,” Baker added. “They’re supposed to be an agency of the government, not an agency of the banks. But reflexively, there they are protecting the banks, again and again and again.”

REUTERS–

The Federal Reserve Bank of New York is investigating whether Goldman Sachs’ (GS.N) mortgage servicing arm did not conduct proper reviews before denying borrowers the option to lower their payments under a government loan modification programme.

In its quarterly filing with the SEC earlier this month, Goldman said regulators had sought information on the foreclosure and servicing protocols and activities of its mortgage servicing unit Litton Loan Servicing.

“We are in possession of the letter and are conducting an inquiry,” a NY Fed spokesperson told Reuters, referring to a letter from a Litton employee sent to the NY Fed by the Financial Times. A spokesperson for Goldman Sachs declined to comment when contacted by Reuters.

“I think we found a white elephant, flying pig and unicorn”

REUTERS–

Goldman Sachs Group Inc (GS.N) executives have good reason to be worried about the risk of receiving subpoenas from the Justice Department, and investors should be concerned too.

The U.S. government has a real chance of finding inconsistencies between Goldman executives’ testimony to Congress and their internal documents, which means subpoenas could turn into something more serious, lawyers said.

Matt Taibbi, Eliot Spitzer and Joshua Rosner on CNN discuss new fraud probe of three major banks. Big banks could go out of business.

This involves other players, not only the banks… and this will go down in History.

NYTimes-

At long last, there may be a serious investigation into the mortgage mess — the kind that results in clarity as well as big fines and maybe even accountability.

Gretchen Morgenson reported in The Times on Tuesday that Eric Schneiderman, the New York attorney general, wants to discuss mortgage operations during the housing bubble with executives of Bank of America, Goldman Sachs and Morgan Stanley. He has also requested documents and information from the banks, examined material given to his predecessor, Andrew Cuomo, and studied issues raised in lawsuits against the banks.

Wall Street Journal-

New York Attorney Attorney General Eric Schneiderman has opened an investigation into the packaging of mortgage loans into securities, in the latest sign of increased scrutiny of the mortgage industry.

Mr. Schneiderman will hold meetings with executives of several major banks, including Bank of America Corp., Morgan Stanley and Goldman Sachs, according to people familiar with the investigation. He intends to discuss securitization of mortgage loans and other mortgage practices and has requested related documents from the firms, these people said. The meetings over securitization are expected to happen in the coming week.

Crooks and Liars–

Matt Taibbi has a new article on Rolling Stone on the recent hearings in the U.S. Senate and whether or not Goldman Sachs executives should be facing criminal trials or not in the wake of ongoing investigations into their part in the financial meltdown we went through a few years ago. CNN decided to bring in the Atlantic Monthly’s Wall Street apologist Megan McArdle to debate Taibbi on Your Money.

NBC’s Lisa Myers introduces us to two industry whistleblowers in the third of her exclusive reports.

“I wish I could say we were just about finished, but sadly we are not.”

NYTimes-

Every few days during the trial of Raj Rajaratnam, the Galleon Group’s co-founder, Preet Bharara, the United States attorney for the Southern District of New York, would quietly enter the courtroom and take a seat in the last row of the gallery.

From that unassuming vantage point, Mr. Bharara watched his colleagues try to persuade a jury to convict the former hedge fund titan of securities fraud and conspiracy.

A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges

Rolling Stones-

They weren’t murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.

[image: abcnews]

BLOOMBERG-

The Justice Department is reviewing a report by a U.S. Senate panel that said Goldman Sachs Group Inc. (GS) misled clients about the firm’s bets on securities tied to the housing market, according to Attorney General Eric Holder.

Holder told the House Judiciary Committee at a hearing today that the department is reviewing the April report by the Senate Permanent Subcommittee on Investigations, led by Senator Carl Levin, a Michigan Democrat. Holder didn’t say which aspects of the report, which probed the causes of 2008 financial crisis, are under review

iWatch

In 2007, the report says, Deutsche Bank rushed to sell off mortgage-backed investments amid worries that the market for subprime loans was deteriorating.

“Keep your fingers crossed but I think we will price this just before the market falls off a cliff,” a Deutsche Bank manager wrote in February 2007 about a deal stocked with securities created from raw material produced by Ameriquest and other subprime lenders.

Spitzer to Holder: Prosecute Goldman Sachs or Resign