More than 60 House Democrats are requesting the Justice Department open an investigation piggybacking the civil fraud charges the Securities and Exchange Commission filed this week against Goldman Sachs.
Rep. Lacy Clay (D-Mo.) and 62 colleagues sent a letter Friday to Attorney General Eric Holder asking the Justice department to “immediately open a case” and investigate whether Goldman Sachs committed criminal fraud clients by issuing financial products based on risky loans without disclosing that a hedge fund manager assembled them and wagered on their failure. The SEC, the letter says, “lacks the authority to act beyond civil actions.”
One Republican, Rep. Mike Burgess of Texas, signed Clay’s letter, according to a list provided by Clay’s office.
Separately, the SEC Inspector General H. David Kotz Friday said he would investigate whether the commission had coordinated with supporters of Democratic-led financial regulatory overhaul to announce the case as the legislation was approaching the floor. That announcement came after several letters from Rep. Darrell Issa of California, the top Republican on the Oversight and Government Affairs committee, requesting an investigation of the announcement’s timing.
Kotz, speaking on Fox News, said the investigation was needed “to understand what led to the decision to announce or bring the case on that day, to see if there was any undue influence involved.”
The letter and announcement of the investigation come just days before Goldman CEO Lloyd Blankfein and other executives are scheduled to testify in front of the Senate Permanent Committee on Investigations.
Reps. Peter DeFazio (D-Ore.) and Elijah Cummings earlier this week asked the SEC to widen its inquiry into a broader range of Goldman mortgage-backed securities.