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Goldman Sachs will not be prosecuted

Eric Linton |

The Justice Department will not prosecute Goldman Sachs or its employees in a financial fraud probe, officials announce Thursday.

In a written, unsigned statement, the department said it conducted an exhaustive investigation of allegations brought to light by a Senate panel investigating the 2008-2009 financial crisis, the Associated Press reported.

“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the department said.

But the department added that if additional or new evidence were to emerge, it could change its mind.

A Senate subcommittee chaired by Sen. Carl Levin, D-Mich., in April 2011 found that Goldman marketed four sets of complex mortgage securities, called Abacus, to banks and other investors but failed to tell clients how risky they were. The panel said Goldman secretly bet against its investors’ positions and deceived them about its own positions to shift risk from its balance sheet to theirs.

The Justice Department’s decision capped a good day for Goldman as the Securities and Exchange Commission also decided not to file charges against the firm over a $1.3 billion subprime mortgage portfolio.

Goldman employee Fabrice Tourre still faces a civil complaint from the SEC,Reuters reported. He has denied any wrongdoing and was the only person accused.

Goldman itself settled with the SEC for $550 million in July 2010 without admitting wrongdoing.

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