Tags: US | Goldman | Sachs

Source: Goldman Sachs CEO Blankfein to Testify Before Senate

Wednesday, 21 Apr 2010 01:28 PM

Goldman Sachs Group Inc. CEO Lloyd Blankfein will testify before a Senate panel next week as his company faces civil fraud charges, a person familiar with the matter said.

Blankfein will answer questions before the Senate's Permanent Subcommittee on Investigations on Tuesday, according to the person. He spoke on condition of anonymity because the appearance hasn't been publicly announced.

Blankfein is scheduled to discuss Goldman's role in the subprime mortgage crisis but is expected to be questioned on the Securities and Exchange Commission's civil fraud lawsuit filed Friday, the person said.

The SEC suit alleges the bank misled investors who bought complex mortgage-related products that were crafted in part by a hedge fund billionaire who was betting that they would fail. A 31-year-old Goldman employee, Fabrice Tourre, was also named in the suit.

Goldman has denied the SEC charge.

Blankfein agreed to appear before the panel before the SEC sued the bank, according to the person.

Blankfein so far has only addressed the charges internally.

In a message to Goldman employees over the weekend, the CEO said the company "has never condoned and would never condone inappropriate activity by any of our people."

Meanwhile, Germany's BayernLB bank says it is cutting its business ties to Goldman in wake of the charges.

Matthias Luecke, a spokesman for Munich-based public-sector bank BayernLB, confirmed a news report Wednesday by the daily Handelsblatt that new CEO Gerd Haeusler informed Goldman Sachs of the decision this week. He gave no details.

Handelsblatt said a letter from Haeusler cited the fraud case brought against Goldman.

The report said Goldman had advised BayernLB on capitalization and on risk management regarding toxic assets since late 2008.

BayernLB suffered hefty losses in the financial crisis and needed to be rescued by German authorities.

Already, other potential costs to Goldman are piling up.

Britain's Financial Services Authority said Tuesday it will investigate Goldman Sachs International, an overseas subsidiary. And German regulator BaFin will ask the SEC for information as it considers bringing its own charges, Germany's Welt am Sonntag newspaper reported, quoting a spokesman for Chancellor Angela Merkel.

Still, there appears to be little concern about Goldman's long-term health. Credit Suisse analysts still say they think Goldman will continue to outperform the financial sector, they wrote in a research note Monday.

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Goldman SachsGroup Inc. CEO Lloyd Blankfein will testify before a Senate panel next week as his company faces civil fraud charges, a person familiar with the matter said. Blankfein will answer questions before the Senate's Permanent Subcommittee on Investigations on...
US,Goldman,Sachs
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2010-28-21
Wednesday, 21 Apr 2010 01:28 PM
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