WASHINGTON, April 26 (UPI) -- Documents released Monday show Goldman Sachs & Co. boosted the market for toxic mortgage-related securities and profited when it collapsed, a lawmaker said.
Sen. Carl Levin, D-Mich., chairman of the Senate Permanent Subcommittee on Investigations -- which is to take up the Goldman Sachs case Tuesday -- said the company's internal documents reveal how it helped set up the mortgage meltdown that led to the global financial crisis, the Chicago Tribune reported.
"The evidence shows that Goldman Sachs helped build and operate that conveyor belt that fed toxic mortgages and mortgage securities into the financial system, and then made large bets against the market it helped create ... reaping the profits from it," Levin said.
Goldman Sachs is the focus of a fraud suit by the U.S. Securities and Exchange Commission. Company Chief Executive Lloyd Blankfein maintains in prepared testimony the company tried to balance its mortgage investments and did not bet heavily against the housing market at the expense of its clients.
"We didn't have a massive short against the housing market and we certainly did not bet against our clients," Blankfein said, noting Goldman lost $1.2 billion on housing investments in 2007 and 2008. "Rather, we believe that we managed our risk as our shareholders and our regulators would expect."