Housing Market, Goldman Sachs | featured news

The U.S. Justice Department said it will not pursue criminal charges against Goldman Sachs Group Inc or its employees related to accusations that the firm bet against the same subprime mortgage securities it was selling to clients.

Goldman Sachs designed, marketed and sold collateralized debt obligations that misled investors and created conflicts of interest as the company built short positions before the U.S. housing market collapsed, a Senate panel said in its report on the financial crisis.

Goldman Sachs CEO Lloyd Blankfein, in written testimony prepared for a Senate hearing on Tuesday, said his firm "certainly did not bet against our clients."

Recently released emails show how Goldman Sachs built its mortgage business by closely working with lenders such as Washington Mutual and Long Beach, two firms that a Senate review said "polluted the financial system" with souring loans.

A Senate investigation into the financial crisis has found that Goldman Sachs, the storied Wall Street investment bank, sought to profit from the historic decline in housing prices by betting against the US mortgage market.