Neil Barofsky, SIGTARP, the TARP inspector general, is gunnin' for Wall Street. So reports Reuters:
The special inspector general for the government's bailout program said he would probe whether securities sold by Goldman Sachs Group Inc (GS.N) led to losses at AIG and if the American taxpayer was a victim of fraud.
Barofsky said he is in touch with the SEC and will possibly coordinate with the Department of Justice "to see if there are cases of fraud and if AIG and as a result, the American taxpayers, were victims of similar types of fraud."
Barofsky made the comments in response to questions from the ranking Republican on the Senate Finance Committee, Charles Grassley, at a hearing examining the TARP.
Separately, but also in response to questions, Barofsky said he is considering a broader audit of the role of BlackRock Inc (BLK.N) in TARP.
"We are doing a number of audits that touch on Blackrock's role. And it is an extensive role throughout this financial crisis," Barofsky said.
For example, current audits, including one on Citigroup Inc's (C.N) asset guarantee program, touch on Blackrock, he said.
"We are considering doing a more overarching audit report on their role throughout the financial crisis."
Indeed, our most read post of all time is an overview of the SIGTARP report which announced the U.S. taxpayer is liable for $23.7 trillion dollars in the bail out. That's not due to any great insight on our part, it's due to the thoroughness of this damning report SIGTARP presented. The January 2010 SIGTARP report listed many ongoing civil and criminal investigations, so Reuter's confirmation comes as no surprise.
In the April SIGTARP report, there are 84 reported criminal and civil investigations ongoing.
Zero Hedge has more and specifically asks SIGTARP to look into a couple of things.
Can someone finally ask Blankfein or Viniar or whoever, how much money Goldman made on its CDS over AIG's exposure in all Goldman underwritten and AIG purchased CDOs?
please also investigate why the Federal Reserve is actively managing its Maiden Lane portfolio, presumably via BlackRock, and whether BlackRock is also advising the Fed on managing its $2.5 trillion SOMA holdings, which as was discussed yesterday has a DV01 of $1.5 billion, and is the biggest ticking time bomb at the heart of the US banking system, and just how much any such off-balance sheet hedging costs the US taxpayer.
Since Zero Hedge has done such a great job here in asking the meat questions, I'll just write ditto, me too.
If you're wondering what a DV01 is, that's a calculation. It stands for the dollar value of one basis point and it's used in bonds. SOMA is a Federal Reserve System Open Market Account. Here is the Zero Hedge post, analyzing the Maiden Lane I fund vs. SOMA. It's saying 1 basis point equals $1 billion to $1.5 billion dollar loss. So, a 1% (a basis point is 1/100th of a percentage value) change in interest is a $100 to a $150 billion dollar loss.