SEC May Bring Charges Against Goldman Sachs, Wells Fargo For Subprime Mortgage Bonds

Mary Schapiro, chairman of the Securities and Exchange Commission. The SEC may bring enforcement actions against Wells Fargo and Goldman Sachs for actions related to bonds backed by subprime mortgages.

SAN FRANCISCO -- Wells Fargo & Co. and Goldman Sachs Group Inc. said Tuesday they may face federal enforcement action by the U.S. Securities and Exchange Commission related to mortgage-backed securities.

San Francisco-based Wells Fargo and New York-based Goldman said in regulatory filings that they had received Wells notices from the SEC. The notices generally indicate that the SEC plans to bring charges or take other enforcement action against a company. The notice is not required but provides a company with the chance to argue why the action shouldn't be taken.

Wells Fargo said that government agencies continue to investigate its mortgage-related practices. That includes whether the company broke any laws and properly disclosed facts and risks associated with mortgage-backed securities.

Goldman said its notice centered on an offering underwritten by the firm in late 2006 of about $1.3 billion in subprime residential mortgage-backed securities.

Both banks said they were providing information to government agencies in connection with the investigations.

Mortgage-backed securities consist of pools of mortgages that are bundled together and sold to investors. The collapse in value of the securities played a major role in the financial meltdown of 2008. A number of banks face potential action by the SEC as regulators determine whether they misrepresented the quality of the loans they were packaging and selling.

Shares of Goldman Sachs were down 81 cents at $116.30 in afterhours trading. They had ended the regular session up $1.23 at $117.11

Wells Fargo was unchanged in extended trading. Its shares gained 34 cents to $31.37 during the regular session.

Comments

[pinetar]

06:32 AM on 03/01/2012

I cant see the SMOKE IT TOO THICK...

[mgrant33301]

06:13 AM on 03/01/2012

nothing will happen. no one will be held accountable for the crimes committed, and life will go on.

[jcaunter]

10:34 PM on 02/29/2012

It's a civil investigation, and they'll settle out of court with "no admission of guilt".

Criminals, all.

[PlasmaX]

08:29 PM on 02/29/2012

They are finally going after the banks on behalf of the large investors while continuing to leave the defrauded homeowners twisting in the wind. The money guys get some form of justice while the middle class gets nothing. We are only half way through the foreclosure fraud mess perpetuated by the greedy banksters and nothing substantial is being done to stop them from taking peoples homes. Are we all to become refugees in the new America?

[Henry]

03:47 PM on 02/29/2012

I understand that Shapiro and staff are still trying to locate first base at Fenway Park. As soon as they can accomplish this they can get to their extensive backload.

[jcaunter]

10:35 PM on 02/29/2012

I doubt they'll actually be able to tear themselves away from their important porn browsing activities to even get that far.

[hatekeepsmewarm]

02:51 PM on 02/29/2012

As others have pointed out, the statute of limitation has already expired on most of these claims so this looks like just another PR stunt by Obama. Gee, I wonder why he and his appointed puppets waited so long to bring charges - I wonder if has anything to do with it being an election year.

It's almost like he suddenly realized that the people who elected him were asking why he spent the last 3 years in office protecting everyone but them.

[rosiebag]

01:40 PM on 02/29/2012

Corzine to lead charge.

[4eva]

01:29 PM on 02/29/2012

I doubt it.
Shapiro is feeling the PR heat but nothing will come of this.
Why? Because she' not the boss.

[mytradingrobot]

10:04 PM on 02/29/2012

I agree - it would seem there is a coordinated effort to stall things until the statute of limitations expires.

I am shocked that no one has filed a class action suit against government officials who repeatedly look the other way even when sworn testimony before congress states that illegal things were done.

MF Global is just the latest fad. There are so many violations of SEC rules governing futures/stock broker/dealers, its not even funny. Yet you do not see any action - nothing at all. It should be an easy case to prove - the fact "you did not know" - is all that it takes - as a principal of the firm you are taking responsibility for those below you. Signing off on the financials means you should know.

[laura r]

01:02 PM on 02/29/2012

Talk is cheap and that is all we have been hearing. Four years later and many commission panels, there has been no action. The congressional financial commission, has already identify the fraud; but no one has done a thing about it.

”Whoever controls the volume of money in any country is absolute master of all industry and commerce.”
James A. Garfield

[Stretchumall]

12:55 PM on 02/29/2012

I'm saving my popcorn for the Perp Walk!

[Oginikwe]

01:44 AM on 03/01/2012

It'll be moldy by then.

[sylvia wadlington]

11:46 AM on 02/29/2012

I will believe it when I see it. There are a lot of Big Bankers and Wall Street Brokers who are enjoying the lavish lifestyle their theft of the country's economy gave them. I hear threats against them all the time and once in a while some flunky is paid to take a dive, but the big guys just keep on thinking up new ways to rob the American people. When it comes to Big Banking, Big Investing, Big Pharma and Big Oil there never is any justice, they buy their way out every time!

[sammi 56]

12:03 PM on 02/29/2012

Not this time-- President Obama is on the hunt.

[Olderandwiser55]

12:17 PM on 02/29/2012

Agree. This is big financial news around the internet. And the LIBOR rate investigation against the world banking cartel-excellent. Few people get it but I'm impressed.

[Lindytindy]

10:34 AM on 02/29/2012

Right, I can't wait to see this farce unfold. "May" bring charges. Right. The 1% defy the rule of law with impunity while the rest of us are subject to increasingly cruel laws that imprison too many people. One in nine of us are in jail or prison. Doesn't that strike you as odd considering zero criminal bankers or Congresspersons are in prison? The laws they make only apply to us. if that isn't the definition of tyranny I don't know what is.

[LeLoup]

09:24 AM on 02/29/2012

Yeah! Yeah! Yeah! Yeah!

"Bring charges" with Mary Schapiro's picture on the same page! Is this a joke??

[Gary Storch]

09:09 AM on 02/29/2012

They should get rectally probed!

[Lindytindy]

10:36 AM on 02/29/2012

No that procedure is only for us. What a joke the whole thing is, the SEC should be in prison for aiding and abetting Wall Street crimes.

[Trustfunded1]

07:52 AM on 02/29/2012

IOW's Mary Shapiro is going to hand down more fines.

Fines don't stop criminal behaviour
They only encourage more bad behaviour.