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Goldman Sachs Subpoenaed

Is the vampire squid about to become the prey rather than the predator? Investment bank Goldman Sachs has received a subpoena from the Manhattan district attorney in relation to the credit crisis and the firm’s handling of mortgage-backed securities. Neither the prosecutor nor the bank would comment, but it’s tied to a report by the Senate Permanent Subcommittee on Investigations looking into banks’ role in the housing market collapse, which alleged that Goldman misled buyers into purchasing mortgage-linked products that the firm believed were of poor quality. While the subpoena is seen as a bad sign—Goldman’s stock is down since the news broke—it doesn’t necessarily mean that the company will become the target of a criminal investigation.

June 2, 2011 6:25 AM