Federal prosecutors are conducting a criminal investigation into whether Goldman Sachs Group Inc. or its employees committed securities fraud in connection with its mortgage trading, people familiar with the probe say. The investigation from the Manhattan U.S. Attorney's Office, which is at a preliminary stage, stemmed from a referral from the Securities and Exchange Commission, these people say. The SEC recently filed civil securities-fraud charges against the big Wall Street firm and a trader in its mortgage group. Goldman and the trader say they have done nothing wrong and are fighting the civil charges. http://online.wsj.com/article/SB100...52998348876.html?mod=WSJ_hpp_MIDDLETopStories Mortgage trading is the wrong division...
April 30 (Bloomberg) -- Goldman Sachs Group Inc. was downgraded to âneutralâ from âbuyâ at Bank of America Corp. because federal prosecutors are weighing criminal fraud charges against Wall Streetâs most-profitable firm. Bank of America also reduced its share-price estimate on Goldman Sachs to $160 from $220, according to a report dated today. The stock has sunk to $160.24 from $184.27 on April 15, the day before the U.S. Securities and Exchange Commission announced a civil lawsuit alleging the New York-based bank misled investors in a mortgage-linked investment. Federal prosecutors in New York are investigating transactions by Goldman Sachs to determine whether to pursue a criminal fraud case, according to two people familiar with the matter. The review, which lawyers say is common in such a high- profile case, is being done by the U.S. attorney in Manhattan, said the people, who werenât authorized to comment and spoke on condition of anonymity. âWe continue to believe that GS has long-term earnings power beyond what is discounted in the share price,â Guy Moszkowski, an analyst at Charlotte, North Carolina-based Bank of America, wrote in a report sent to clients today. âHowever, it is very difficult to see the shares making further progress until the matter has been resolved.â