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Lloyd Blankfein Lawyers Up: Report

Goldman Sachs article updated with company comment

  • Goldman Sachs (GS - Get Report) CEO Lloyd Blankfein has hired a high-profile Washington D.C. defense attorney, Reuters reports.
  • Attorney Reid Weingarten's past clients include a former Enron accounting officer.
  • Goldman faces several civil lawsuits and federal investigations tied to the 2008 financial crisis.

NEW YORK ( TheStreet) -- Goldman Sachs (GS - Get Report) CEO Lloyd Blankfein has hired high-profile defense attorney Reid Weingarten, Reuters reported late Monday, citing a government official.

Blankfein has not been charged with any civil or criminal case. Goldman Sachs has, however, been targeted by investigators for allegedly selling mortgage-backed securities that were backed by loans that were destined to fail, trading against the interest of its clients and for favoring some clients over others.
Goldman Sachs CEO Lloyd Blankfein

Weingarten is a partner at a partner at Steptoe & Johnson, whose past clients include senior executives at Enron, Worldcom and Tyco. The lawyer has worked on cases involving bank fraud, bribery and public corruption, according to the law firm's web site. He is also Attorney General Eric Holder's close friend and lawyer , according to published reports.

Goldman Sachs said Blankfein and other executives hired counsel following the Senate Subcommittee report on the firm's dealings in the run up to the crisis.

The Senate Permanent Subcommittee on Investigations accused Goldman in April of exploiting clients, selling them sub-prime mortgage backed securities even as the firm had a massive short against the market. The report also alleged that Goldman's executives had misled Congress during testimony in 2010.

The investment bank also received a subpoena from the New York attorney general's office in June to explain its actions in the run up to the crisis.

"As is common in such situations, Mr Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department's inquiry into certain matters raised in the PSI report hired counsel at the outset," Goldman Sachs spokesperson David Wells said in an email statement.

Things had quieted down on the legal front for Goldman Sachs in recent months, although its latest 10Q quarterly filing disclosed further lawsuits.

The company did, however, lower its provision for "reasonably possible" legal losses to $2 billion in the second quarter.


-- Written by Shanthi Bharatwaj in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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