We live in a shabby world when CEOs at the mere mention of being interviewed by the DOJ immediately hire a lawyer. Maybe Blankfein will finally explain the difference between hedges and betting "against the products they were selling to clients."
Maybe the predator will be stopped from stealing the wealth of the public and be tried in a criminal, not a civil, case.
Under Fire, Goldman Sachs CEO Hires Top-Notch Attorney
By Elizabeth MacDonald - FOXBusiness
Goldman Sachs’ shares nosedived nearly 5% after it confirmed that its chief executive, Lloyd Blankfein, has hired Reid Weingarten, a high-profile Washington, D.C., defense attorney to defend the embattled executive in connection with the Department of Justice’s inquiry into Blankfein and other firm officials.
The Justice probe is looking into findings in a report by the Senate Permanent Subcommittee on Investigations which alleges Goldman Sachs (GS) executives misled Congress and investors about its mortgage-backed securities deals.
Weingarten’s past clients include a former Agriculture secretary charged with corruption, the top executive of WorldCom, and an Enron accounting officer.
“As is common in such situations, Mr. Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department’s inquiry into certain matters raised in the PSI
(Senate Permanent Subcommittee on Investigations) report hired counsel at the outset,” the firm’s statement says, which was issued after the news broke that its CEO hired Weingarten, who is with the firm Steptoe & Johnson.
Democratic Sen. Carl Levin of Michigan and Republican Tom Coburn of Oklahoma earlier this year had jointly signed a letter asking Justice and the SEC to examine the Senate panel’s report, which suggested Goldman Sachs CEO Blankfein lied under oath when he said the firm didn’t have a massive short position against the housing market, and that Goldman Sachs misled investors when it didn’t disclose to clients that it was betting against securities it was selling to them.
In April 2010 CEO Blankfein testified under oath before the Senate Subcommittee: “Much has been said about the supposedly massive short Goldman Sachs had on the U.S. housing market. The fact is we were not consistently or significantly net ‘short the market’ in residential mortgage-related products in 2007 and 2008…We didn’t have a massive short against the housing market and we certainly did not bet against our clients.”
Based on evidence in the Senate’s 635-page report, Senator Levin has said: “In my judgment, Goldman clearly misled their clients and they misled Congress.”
Meanwhile, an SEC official has already told FOX Business: “The SEC is not inhibited from bringing any future action against Goldman Sachs. Goldman is not fully absolved of its sins, if the information shows a case can be brought. The SEC can still come back to Goldman Sachs.”
Weingarten will likely do a full court press that Goldman Sachs was not net short mortgage-backed securities (MBS) or housing, even though internal emails and documents released by the Senate panel show firm executives used the term the “big short” on housing, and that the firm didn’t tell investors it was shorting deals it was selling to them, betting they would fail.
Weingarten is known for courtroom theatrics and for attacking opponents' credibility, but he has a mixed track record in securities and accounting cases. Weingarten won an acquittal on charges of securities fraud and grand larceny for client Mark Belnick, former general counsel of Tyco, where former executives Dennis Koslowski and Mark Swartz were found guilty of stealing $150 million from the conglomerate.
Weingarten in recent years took on the case of former Enron accountant Richard Causey, who had pled guilty to one count of securities fraud (attorney Daniel Petrocelli initially represented Causey).
But Weingarten lost securities fraud cases for Bernie Ebbers at WorldCom and Franklin Brown at Rite Aid, who was convicted of 10 counts stemming from accounting irregularities at the drug store chain.
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