Goldman Sachs (GS) intends to release documents to counter a Senate subcommittee report that said the securities firm misinformed clients about mortgage-linked securities, the Wall Street Journal reported, citing people familiar with the matter.
Goldman, facing probes by several government authorities into derivatives trades it executed in 2006 and 2007, could release documents about its mortgage bets to show that the analysis by the subcommittee was not only inaccurate and incomplete, but also that its report drastically overstated Goldman’s bets against the housing market, the paper said.
The information could be released soon on Goldman’s website, though a decision has not been made yet, the paper added.
The subcommittee’s 639-page report in April denounced Goldman by implying that Wall Street’s most powerful firm offloaded the majority of its subprime mortgage exposure to trusting clients when the marketplace for this kind of investments was beginning to tank.
As an example, one of the most stunning documents introduced by the panel, headed by Democrat Carl Levin, is a graph showing the figures on Goldman’s overall long or short positions on the housing sector. While those bets varied from day to day, the Senate subcommittee said Goldman had net short positions of $10.6 billion on Feb. 26, 2007, and $13.9 billion on June 25, 2007. The June 25 position was the firms’ largest bet against the housing marketplace, according to the Senate subcommittee.
Last week, Goldman received a subpoena from the Manhattan district attorney, who joined the DOJ and the SEC in investigating Goldman’s actions.
GS lost $0.59, or less than one percent, to $134.74 at 12:04 pm E.T. in New York Stock Exchange trading.