Goldman Sachs and Deutsche Bank 'issued with subpoenas'

30 July 2009

A US Senate panel has issued subpoenas to Goldman Sachs and Deutsche Bank, it has emerged.

According to the Wall Street Journal, the two financial institutions are being investigated for evidence of wrongdoing or fraud in the collapse of the mortgage market last year.

The probe will focus on whether internal memos from executives at the bank indicate that they were privately unsure of the financial viability of the mortgage securities they were assembling.

Citing people familiar with the matter, the news source said that Washington Mutual, which is now largely owned by JP Morgan Chase, has also been issued with a subpoena.

"It appears likely that several other financial institutions also have received subpoenas," the newspaper stated.

Both Goldman Sachs and Deutsche Bank reported strong second-quarter earnings earlier this month.

Goldman Sachs' earnings rose 33 per cent, while net profit at Deutsche Bank rose 68 per cent over the three-month period.

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