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Goldman Sachs CEO Lloyd Blankfein has hired a high-profile defense attorney, Reuters reports, as investigations into Goldman and its role in the financial crisis continue.
Goldman Sachs Chief Executive Lloyd Blankfein has hired a high-profile Washington defense attorney, Reuters reports, as investigations into Goldman and its role in the financial crisis continue.
In April, the Senate's Permanent Subcommittee on Investigations released a report criticizing Goldman Sachs for "exploiting" clients when unloading subprime loan exposure in 2006 and 2007, according to Reuters.
A government source told the news agency that Blankfein, who has not been charged in any criminal or civil case, has hired Reid Weingarten of Steptoe & Johnson LLP, who has previously represented former WorldCom chief Bernard Ebbers and former Enron accounting officer Richard Causey.
In a statement on Monday, Goldman confirmed that Blankfein and other executives had hired outside lawyers to advise them:
"As is common in such situations, Mr. Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department's inquiry into certain matters raised in the [Permanent Subcommittee on Investigations] report hired counsel at the outset."
The Wall Street Journal reports that though his bank faces investigations and subpoenas on federal, state and local levels, "it isn't clear precisely why Mr. Blankfein hired a lawyer who focuses his practice on white-collar criminal defense."
But attorneys specializing in criminal law told the paper the move did not strike them as unusual.
"It's a regular practice both in internal investigations and in any large-scale interest by the government," Daniel Richman, a law professor at Columbia University, said.
According to the Journal, Goldman Sachs has acknowledged in securities filings that the Senate report "was referred to the Justice Department for further investigation, and that it 'is cooperating with the investigations arising from this referral, which are ongoing.'"
The New York Times reports that shares of Goldman fell nearly 5 percent after Reuters reported the news about Weingarten.
In July 2010, the Securities and Exchange Commission reached a $550 million settlement with Goldman, the largest-ever penalty paid by a Wall Street firm, over charges that the bank misled investors about its subprime mortgage products.
And in June, New York prosecutors subpoenaed the bank for information, a move prompted by the April Senate report, according to the Times.
Blankfein, 56, is in his sixth year as Goldman's CEO.