Welch speaks out against alleged fraud at Goldman Sachs

Rep. Peter Welch on Thursday called on Attorney General Eric Holder to open a criminal investigation into Goldman Sachs allegedly fraudulent sale of securities designed to fail.

Welch joined Rep. Marcy Kaptur (D-Ohio) and other members of Congress in a letter to Holder requesting that the Department of Justice investigate and prosecute those involved in the alleged financial fraud at Goldman and throughout Wall Street.

In a speech delivered on the House floor Thursday morning, Welch repudiated Goldman for the casino culture it fostered at the expense of ordinary Americans.

Goldman has transformed itself from one of the most respected institutions on Wall Street to one of the most reviled for putting itself ahead of its clients and the American people, Welch said. The only difference between the synthetic securities it sold and a game of Texas Holdem is that when Goldman makes a bad bet, the American taxpayer is the loser.

Earlier this week, Welch joined Reps. Peter DeFazio (D-Ore.) and Elijah Cummings (D-Md.) in asking Securities and Exchange Commission Chairwoman Mary Schapiro to determine whether taxpayer support received by the American International Group (AIG) was transferred to Goldman to cover fraudulent activities.

Last Friday the SEC filed a civil suit against Goldman alleging the firm misled investors by failing to disclose that one of 25 collateralized debt obligations (CDOs) sold by the firm was designed to fail. Seven similar CDOs were guaranteed by credit default swaps from AIG. Of the $180 billion AIG received in taxpayer assistance, $12.9 billion was transferred to Goldman to settle the bad credit default swaps.