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Goldman Sachs subpoenaed by crisis panel

By David Ellis, staff writer


NEW YORK (CNNMoney.com) -- A government panel charged with examining the financial crisis said Monday it had subpoenaed Goldman Sachs after what it believed were deliberate attempts by the banking giant to impede its investigation.

The legal order was officially filed late last week by the Financial Crisis Inquiry Commission, a 10-member, bipartisan panel appointed last summer by Congress.

Phil Angelides, the former California treasurer who is heading up the probe, said that investigators made numerous attempts in recent months to secure documents and schedule interviews with executives from Goldman.

Goldman unleashed a blizzard of paperwork in what the commission called a deliberate effort to hinder its investigation. In fact, the commission said the bank "began producing 5 terabytes of documents," or the equivalent of 2.5 billion pages.

"Our view is this has been a very deliberate effort over time to run out the clock," said Angelides, in a press conference with reporters Monday afternoon.

The commission is scheduled to delivering its findings in a report by Dec. 15.

A spokesman for Goldman Sachs said Monday that the company has been and continues "to be committed to providing the FCIC with the information they have requested."

Angelides, joined by the commission's vice chairman Bill Thomas, offered few details about what information the subpoena sought other than it related to some of Goldman's various businesses, including derivatives and securitizaitions.

Thus far, the commission has shown its willingness to use legal power in its investigation of the crisis.

Last week it subpoenaed billionaire investor Warren Buffett after the Berkshire Hathaway (BRKA, Fortune 500) CEO declined the commission's offer to participate in a hearing on the credit rating agency Moody's (MCO).

The commission said it has issued approximately a dozen subpoenas thus far in its investigation, some of which were done merely in order to break confidentiality agreements.

In this instance, Angelides and Thomas said they were left with no other choice after Goldman's slow turnaround in handing over documents and apparent unwillingness to cooperate.

"We are not going to let someone stand in our way," said Angelides.

The commission, however, said it had no plans to request the presence of any Goldman executives at another hearing.

Earlier this year, Lloyd Blankfein, Goldman's chairman and CEO, appeared before the commission along with leaders of the nation's other top bank chiefs. That was the FCIC's first hearing about the root causes of the financial crisis.

The subpoena represents the latest legal setback for Goldman. The company is currently facing civil charges from the Securities and Exchange Commission, which alleged the company attempted to defraud investors. It also faces a handful of lawsuits from individual shareholders for failing to alert investors about its legal tangle with the SEC.

Goldman Sachs (GS, Fortune 500) shares finished over 2% lower on the New York Stock Exchange. To top of page

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