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Mon, Apr 19, 2010 - Page 10 News List

Germany could consider Goldman action

AP , BERLIN

The German government may consider taking legal action in a case in which Goldman Sachs & Co is accused of defrauding investors, a newspaper reported on Saturday.

The US government alleges Goldman Sachs sold mortgage ­investments without telling buyers they were crafted with input from a client who was betting on them failing.

Buyers included German bank IKB Deutsche Industriebank AG — an early victim of the financial crisis that was rescued by the state-owned KfW development bank among others.

The Welt am Sonntag newspaper quoted German Chancellor Angela Merkel’s spokesman UIrich Wilhelm as saying that German regulator BaFin will ask the US Securities and Exchange Commission (SEC) for information.

“After a careful evaluation of the documents, we will examine legal steps,” the report quoted him as saying.

There was no immediate confirmation from the government.

IKB spokeswoman Annette Littmann said the bank was aware of the charges filed by the SEC, but declined to comment further.

The commission said IKB lost nearly all its US$150 million investment.

IKB issued a profit warning in 2007, saying it had been hurt by US subprime mortgage investments. IKB was sold in 2008 to Dallas-based Lone Star Funds.

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