Goldman Sachs Group Inc., the fifth-biggest U.S. bank by assets, was subpoenaed by the Manhattan District Attorney's office for information on the company's activities leading into the credit crisis, two people familiar with the matter said.
The subpoena relates to the Senate's Permanent Subcommittee on Investigations report on Wall Street's role in the collapse of the financial markets, which accused Goldman Sachs of misleading buyers of mortgage-linked investments, the people said, speaking on condition of anonymity because the inquiry isn't public.
Goldman Sachs has dropped 16% in New York trading since the Senate subcommittee, led by Michigan Democrat Carl M. Levin, used the company as a case study in a 640-page report on its findings released in April.
At the time, Levin also said that Goldman Sachs had misled legislators about its bets on the U.S. housing market. Goldman Sachs has said its testimony was truthful.
"We don't comment on specific regulatory or legal issues, but subpoenas are a normal part of the information request process and, of course, when we receive them we cooperate fully," said David Wells, a company spokesman.
A subpoena is a request for information and doesn't mean the company is a target of a criminal investigation. Analysts including Sanford C. Bernstein & Co.'s Brad Hintz have said they don't expect Goldman Sachs to be criminally prosecuted.
Erin Duggan, the chief spokeswoman for Manhattan District Attorney Cyrus Vance Jr., declined to comment.
The Senate report was referred to the Justice Department and the Securities and Exchange Commission, which are also investigating.
Levin said when his report was released that federal prosecutors should review whether to bring perjury charges against Goldman Sachs' chairman and chief executive, Lloyd Blankfein, and other current and former employees who testified to Congress last year.
Levin said that the executives denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own financial profit, statements the senator said were untrue.
Goldman Sachs met last month with New York State Attorney General Eric Schneiderman's office as part of his examination of mortgage securitization before the housing collapse, according to a person familiar with the matter, who spoke on the condition of anonymity because the investigation is not public.
The meeting took place within the past two weeks, the person said.
Schneiderman has been conducting a broad examination of mortgage practices and the packaging and sale of loans to investors, according to the person.
JPMorgan Chase & Co., UBS AG, Deutsche Bank AG, Bank of America Corp., Morgan Stanley and the Royal Bank of Scotland Group PLC also are part of that investigation, the person said. Four bond insurers have been subpoenaed as well.
Lauren Passalacqua, a spokeswoman who represents Schneiderman's office, declined to comment, as did the spokesman for Goldman Sachs.
Last year Goldman Sachs paid $550 million to settle claims from the SEC related to the company's marketing of the complex securities known as collateralized debt obligations.
The settlement resolved claims that Goldman Sachs failed to disclose that the hedge fund Paulson & Co. was betting against, and influenced the selection of, CDOs the company was packaging and selling.
