The bald little man in the oversize suit who lives in a $26 million apartment next to Central Park may yet have the smirk wiped off his face. He hasn’t been charges in any civil or criminal case — up to now, Barack Obama’s Department of Justice has turned a blind eye to Wall Street improprieties — but it’s never a good sign when a master of the universe thinks it’s prudent to hire a heavy-duty defense attorney.
Goldman Sachs Chief Executive Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten, according to a government source, as the Justice Department continues to investigate the bank. Blankfein, 56, is in his sixth year at the helm of the largest U.S. investment bank, which has spent two years fending off accusations of conflicts of interest and fraud. The move to retain Weingarten comes as investigations of Goldman and its role in the 2007-2009 financial crisis continue. The news spooked already jittery investors. Goldman shares fell sharply in the final minutes of regular trading after Reuters reporting the hiring …
The Senate’s Permanent Subcommittee on Investigations (PSI) in April released a scathing report that criticized Goldman for “exploiting” clients by unloading subprime loan exposure onto unsuspecting clients in 2006 and 2007, and concluded that its top executives misled Congress during testimony in 2010.
Goldman Sachs stock “tumbled”. Not surprisingly gold soared, this time above $1,900 an ounce, at roughly the same time.
Idle speculation: Many Wall Street executives who contributed to the Obama campaign in 2008 are throwing money at Mitt Romney this year, supposedly because Obama backed the not-so-impressive Dodd-Frank Act. What if Obama were to hit back by authorizing serious investigation of Wall Street firms that caused the financial collapse?