Sixty lawmakers urge SEC to broaden its Goldman Sachs probe

Five dozen House Democrats have signed a letter calling on the Securities and Exchange Commission (SEC) to broaden its fraud investigation of Goldman Sachs. 

The SEC alleges Goldman did not tell investors a hedge fund betting against a security marketed by Goldman was involved in setting up the mortgage-backed product. The suit focuses on one security.

Democrats, led by Reps. Elijah Cummings (D-Md.) and Peter DeFazio (D-Ore.), contend there could be 24 additional instances of fraud because Goldman peddled not one but 25 of these instruments to investors.

“We’ve got to look into every aspect of these deals and figure out exactly what went wrong,” Cummings said in prepared remarks. “If people were participating in any type of fraudulent activity, we need to expose it, and they need to be brought to justice.” 

The letter asks the SEC to investigate the remaining 24 securities to see if material information was withheld from investors.

Goldman Sachs CEO and Chairman Lloyd Blankfein and other executives will testify Tuesday before a Senate panel as the Senate works to move a package of reforms to Wall Street’s rules.

The focus on Goldman has turned up the political heat on the Senate bill, but it is uncertain if Democrats have the 60 votes necessary to win a procedural vote on Monday night that would allow the bill to come to the Senate floor for debate.