Federal prosecutors in New York have opened a criminal investigation into trading practices of Goldman Sachs and could pursue criminal charges against the investment bank, several American media publications said.
The Securities and Exchange Commission has already filed a civil fraud suit against Goldman in New York for selling mortgage-related securities to investors while at the same time betting the securities would fail, National Public Radio (NPR) noted.
This week, Goldman's top executives came under fire from United States Senate SubCommittee investigating the financial crisis for irresponsible actions in the mortgage market.
Goldman denies any wrongdoing.
"Given the recent focus on the firm, we are not surprised by the report of an inquiry," a Goldman spokesperson said.
"We would fully cooperate with any requests for information."
On Wednesday, 62 US House members sent a letter asking Attorney General Eric Holder to order a criminal investigation into Goldman and other Wall Street banks who may have misled investors in the events up to the subprime mortgage meltdown in 2008, McClatchy newspapers noted.
Last week, mails written by Goldman Sachs executives revealed that the investment bank was making money while the rest of the world was dealing with the financial meltdown.
In one email a Goldman Sachs manager writes "Sounds like we will make some serious money."
His colleague responded: "Yes we are well positioned."
The manager was reacting to news that the credit rating agencies had downgraded $32 billion in mortgage related securities – causing losses for many investors – by noting that Goldman had bet against them, according to the documents released by the Committee.
