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Goldman Sachs at Risk of Facing Civil Lawsuit
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Summary: Goldman Sachs could be facing a civil lawsuit from the government once an investigation into the big bank is complete. 

Back in December federal litigators informed Goldman Sachs Group Inc. that the firm might face a civil lawsuit as a result of the probe by the government into the firm’s sale of mortgage bonds, according to The Wall Street Journal.

  
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Goldman received notice in writing that month from the U.S. Attorney’s Office in the Eastern District of California. The written notice said that the government “preliminarily concluded” that Goldman violated federal law when securitizing, underwriting and selling mortgage bonds.

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The investigation into Goldman is a second investigation under operation at the Justice Department. The penalties in the case should be less than the $7 billion paid by Citigroup in 2014.

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A filing on Monday shows that settlement talks between the Justice Department and Goldman could begin once talks between Morgan Stanley and the government are completed.

In 2014, Goldman put aside $754 million for regulatory and legal proceedings. In 2013, it set aside $962 million. During the fourth quarter, Goldman surpassed $161 million in provisions.



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Since March of 2012, Goldman claims it has redeemed $2.97 billion in hedge-fund investments as the firm made an attempt to comply with the Volcker rule that puts a limit on how banks put their money at risk. In 2014, Goldman sold $762 million in those investments.

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Source: Wall Street Journal



 

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