WASHINGTON — Sen. Elizabeth Warren, D-Mass., criticized what she called Goldman Sachs' dual role in the failure of Silicon Valley Bank in a new letter to the firm.
Warren asked Goldman in a
The request ratchets up federal scrutiny of the role that Goldman played as Silicon Valley Bank approached failure, as Goldman's investment bankers advised Silicon Valley Bank on raising capital, while its trading division purchased a $21 billion loan portfolio from the bank at a discount.
Initially, Warren asked Goldman in June about its dealings with Silicon Valley Bank in a letter last month.
Goldman said it is "cooperating with and providing information to various governmental bodies in connection with their investigations and inquiries into SVB, including the firm's business with SVB in or around March 2023."
In her most recent letter, Warren said that she's worried about Goldman's response to her initial questions.
"I am particularly concerned that, in response to my question about actions that you took to address Goldman's conflicts of interest, the only answer you provided was to inform me that 'in this case, among other things, we informed SVB in writing' of the conflict," she said in the letter.
Warren reiterated questions she said remained unanswered in Goldman's response to her first letter, including what actions Goldman took to prevent conflicts of interest in its dual role, and if any Goldman officials played a role in both transactions.
"I am disappointed and troubled by your failure to provide complete answers to my questions," Warren said.
She also asked new questions, including what the nature of what Goldman called "arms-length" negotiations were between Goldman Sachs and SVB for the purchase of the $21 billion SVB portfolio, and if the firm has been involved in similar advisory roles for banks where it had conflicts of interest.
"Our clients often request that we provide multiple financial services, and we have procedures and controls designed to identify and address potential conflicts of interest," a Goldman spokesperson said in a statement. "Here, as per our conflicts procedures and controls, we specifically informed SVB in writing that Goldman Sachs was not acting as SVB's advisor on the portfolio sale and that SVB should not rely on Goldman Sachs for any advice in this regard but instead should hire a third-party advisor."
