The Justice Department’s criminal investigation into Goldman Sachs goes beyond the financial transactions targeted by the Securities and Exchange Commission in the civil fraud suit brought against the firm last month, law enforcement sources said Friday.
The Justice Department probe began weeks ago and is essentially on a parallel track with the SEC investigation, the sources said. Although prosecutors and investigators are focusing on some of the same mortgage-related transactions as the SEC, the sources said, the Justice Department has cast a wider net.
Investors pounded Goldman Sachs shares Friday as it became increasingly clear the Wall Street bank’s problems are growing.
After initial media reports about the criminal investigation, investors sent Goldman shares down 9.4 percent, or $15.04, to $145.20.
The U.S. attorney’s office in Manhattan and the FBI are conducting the criminal probe, which sources said has been underway for weeks. Sources said a decision on whether to file any charges has not been made.
The U.S. attorney’s office in Manhattan declined to comment. Goldman said it would cooperate with requests for information.
The SEC filed a civil securities fraud case against the firm two weeks ago, and a source familiar with the matter said the SEC had referred that investigation to the Justice Department for possible criminal prosecution.
But law enforcement sources said the probe by the Manhattan U.S. attorney’s office, which is known for aggressively investigating financial fraud cases, was not based on an SEC referral and was underway before the SEC announced the civil case April 16.
