Financial crisis commission subpoenas Goldman Sachs, accuses bank of stonewalling on information
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The federal commission investigating the financial crisis on Monday attacked Goldman Sachs & Co. for failing to cooperate with information requests, and said it was forced to issue a subpoena to get what it wants.
In a conference call with the media, Financial Crisis Inquiry Commission Chairman Phil Angelides and Vice Chairman Bill Thomas accused Goldman of dumping a massive amount of documents on commission staff instead of answering specific information requests.
Angelides and Thomas said that at least half a dozen other major U.S. banks have supplied the commission with detailed responses to its questions. “They are the outlier,” Angelides said of Goldman.
Thomas said Goldman sent the FCIC the equivalent of 2.5 billion pages of information without providing indexes to assist the commission in combing through the documents.
The FCIC, Thomas said, shouldn’t have to search for the proverbial needle in the haystack. “We expect them to provide us with the needle,” he said.
A person familiar with the situation said Goldman had been stonewalling the commission on its requests, then suddenly flooded investigators with documents in the last two weeks.
Congress created the bipartisan commission last year to conduct a broad probe into the credit-market debacle and the resulting crash in financial markets. The commission’s final report is due in December.
Angelides said Goldman’s strategy appeared to be “a very deliberate effort to run out the clock” as the commission nears its deadline.
Thomas, sounding exasperated and aggravated, added: “What have they got to hide?”
Asked about the subpoena, a Goldman spokesman said: “We have been and continue to be committed to providing the FCIC with the information they have requested.”
In a potential landmark case, the Securities and Exchange Commission in April charged Goldman with civil fraud in its marketing of complex mortgage-related securities in 2007. The bank has denied wrongdoing.
The FCIC has interviewed more than 800 people as part of its probe. The vast majority of the individuals and firms contacted have provided information without being compelled by subpoena. But the commission had to resort to subpoenas to get testimony last week from Moody’s Corp. and billionaire Warren Buffett for a hearing on the role of credit-rating firms in the mortgage meltdown.
Goldman shares were down $2.17 to $140.08 at about 11:30 a.m. PDT.
-- Tom Petruno