While this Blog generally focuses on bankruptcy-related issues, I thought it would be interesting to provide some of the key information about the Government’s fraud investigation into Goldman Sachs; after all, the subprime debacle caused the most severe financial collapse since the Great Depression.  There is no doubt that the Government on both sides of the aisle is looking for blood from Goldman Sachs, but more than that, the Government is currently seeking financial reform. 

Whether Goldman Sachs contributed to the financial collapse (and if so, to what extent) likely will be debated for years to come.  Information is still unfolding.  Here is a link to watch the Goldman Sachs live testimony before Congress:  Live Testimony via C-Span.   Here is SEC’s Complaint against Goldman Sachs (essentially alleged that Goldman Sachs didn’t disclose that it was shorting positions in CDOs it was selling) and here are 900 pages of the US Government’s Exhibits against Goldman Sachs, including internal emails from Goldman Sachs.  Here is a good article from the Wall Street Journal explaining the SEC charges against Goldman Sachs.

The issue for Goldman Sachs is not so much the financial cost to, or punishment that may or may not be imposed on, it, but rather the damage to its reputation.  It will be interesting to see if the Government pursues other financial institutions that were involved in the subprime crisis.  While Wall Street is an easy target, what we are watching is really less of a witch-hunt and more of a grand show to support changes in financial regulations.