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US won't charge Goldman Sachs over financial crisis

Justice Department will not charge Goldman Sachs in financial fraud probe.

Goldman sachs charges probe 2012 08 10Enlarge
The US Justice Department will not bring charges against Goldman Sachs or any employees relating to the financial crisis. (STAN HONDA/AFP/Getty Images)

Wall Street firm Goldman Sachs will escape criminal charges related to the mortgage crisis after a Justice Department fraud probe did not find enough evidence to charge the company or any employees.

The charges stem from an April 2011 inquiry requested by US Senator Carl Levin after the subcommittee he leads spent more than a year looking into Goldman, reports Reuters.

The accusations against Goldman were aired in a heated 2010 Congressional hearing in which Levin grilled Goldman Chief Executive Lloyd Blankfein for hours about risky securities it sold to banks and other investors that the company described internally as "flying pig" and "crap".

The reputation of Goldman, the company famously dubbed "the great vampire squid," was already battered by fraud charges brought by the Securities and Exchange Commission related to a mortgage-bond deal gone bad.

Goldman agreed to pay $550 million to settle the allegations they misled buyers of mortgage-related securities, the Wall Street Journal reported.

The Justice Department concluded that there was not enough evidence that Goldman acted criminally.

"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 in a statement to Fox News.

But the department added that it would reconsider the charges if additional or new evidence were to emerge.

Neil Barofsky, a former watchdog for the US government's financial system bailout in 2008, told Reuters that the announcement was a reminder that no one on Wall Street has yet been held accountable for the financial crisis.

"Without such accountability, the unending parade of megabanks scandals will inevitably continue," Barofsky said.

http://www.globalpost.com/dispatch/news/business/120810/us-wont-proscute-goldman-sachs-over-financial-crisis