Lloyd Blankfein, Goldman Sachs’ gold-plated chief executive, has hired a hot-shot white-collar criminal defense lawyer to represent him personally as a Justice Department probe of the firm’s management kicks into high gear.
The DoJ investigation into Goldman was spurred by Levin, who accused Blankfein of perjury in a scathing 650-page report from the PSI issued at the beginning of the year.
A well-regarded corporate lawyer, Weingarten has represented notorious clients such as Bernie Ebbers, former WorldCom CEO, who was convicted of fraud and conspiracy in 2005.
Weingarten, a partner at Steptoe & Johnson and a good friend of Attorney General Eric Holder, will offer the Goldman boss legal representation that’s separate from the investment bank’s stable of in-house legal eagles -- a move that suggests that the interests of the firm and Blankfein have begun to diverge.
Weingarten didn’t return a call seeking comment.
“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,” a Goldman spokesman said in a statement.
Goldman shares closed at $106.51, down 4.7 percent to a 52-week low, erasing $2.6 billion in market cap.
Goldman also is facing additional probes from New York Attorney General Eric Schneiderman, the SEC and the Commodity Futures Trading Commission.
Despite the probes, sources say that Blankfein maintains the support of Goldman’s board and does not plan on resigning any time soon.
The 650-page subcommittee report (PDF) presented on April 13, 2011, which cites Blankfein 79 times, begs to differ.
It also suggested that Goldman executives, including Blankfein, misled Congress in testimony surrounding the Abacus CDO, Hudson, Timberwolf, and other deals, by saying it didn’t have a big short.
The top lesson I learned before leaving Goldman in the wake of Enron was Goldman’s foremost internal policy is to protect Goldman. On Monday, Goldman shares took a 6 percent beating during final and extended trading hours on the announcement that Blankfein had hired a lawyer, without waiting for specifics. You could look at Blankfein hiring external counsel as a normal prudent, legal move. If, as Wells indicates, Blankfein hired outside counsel to deal with the PSI report, he may be considering the prospect of a perjury and related obstruction of justice charge.
The report time lines, trade volumes, and emails point to this conclusion, whereas Blankfein’s words are at odds with it.
I emailed Goldman Sachs spokesman David Wells to ask:
Will there be other members of Goldman similarly seeking external counsel?”
Blankfein may find himself in a parallel situation. If, as Wells indicates, the CEO hired outside counsel to deal with the PSI report, he may be considering the prospect of a perjury and related obstruction of justice charge.
But in Weingarten’s other major cases, the clients were charged with inflating books, committing fraud, or stealing money.