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Goldman Sachs Plunges in Late Trading on News CEO Blankfein Hires High-Profile Defense Attorney; Perjury Regarding Testimony Before Congress Proposed

Lloyd Blankfein, CEO Goldman Sachs

Shares of Goldman Sachs hit the skids in late trading so much so that people were asking “what’s up?”

GS – Goldman Sachs 15-Minute Chart

Reuters explains in Goldman CEO hires high-profile attorney

Goldman Sachs Chief Executive Lloyd Blankfein has hired Reid Weingarten, a high-profile Washington defense attorney whose past clients include a former Enron accounting officer, according to a government source familiar with the matter.

Blankfein, 56, is in his sixth year at the helm of the largest U.S. investment bank, which has spent two years dodging accusations of conflicts of interest and fraud.

The move to retain Weingarten comes as investigations of Goldman and its role in the 2007-2009 financial crisis continue.

The U.S. Securities and Exchange Commission scored a $550 million settlement against the bank in a fraud lawsuit in July 2010, but other investigations continue.

“Why do you bring in someone like that?” said the source, who was not authorized to speak publicly. “It says one thing: that they’re taking it seriously.”

Blankfein has not been charged in any civil or criminal case, and it was not immediately clear why he hired Weingarten.

One former federal prosecutor, who was not authorized to speak publicly, said Blankfein may have hired outside counsel after receiving a request from investigators for documents or other information.

The Senate report raised questions about inconsistencies between testimony from Blankfein and other Goldman executives to Congress and emails unearthed in the Senate investigation. The subcommittee’s chairman, Senator Carl Levin, has said the question of whether Blankfein and others committed perjury is up to the relevant federal agencies.

The former prosecutor cautioned that perjury cases were difficult to prove, adding that prosecutors would not bring charges unless they had a “rock solid case.

GS – Goldman Sachs Monthly Chart

Whatever the reasons, Goldman Sachs is revisiting a share price last seen in 2009.

I truly hope they nail Lloyd Blankfein and the New York Fed along with him. Do [not] count on it. No one has paid a price yet.

Note: That was supposed to say do “not” count on it. I accidentally left out the “not” and just added it in.

Mike  “Mish”  Shedlock

Global Economic Analysis

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