Goldman’s Blankfein, Tourre to face Senate panel

Goldman Sachs Chief Executive Lloyd Blankfein and the bond trader at the center of a high-profile civil fraud case against the company will appear on Tuesday before a Senate panel, the committee said on Thursday.

Blankfein and Fabrice Tourre are among the blockbuster lineup of current and former Goldman officials who will face off with Democratic Senator Carl Levin, a senior member of Congress known for his cutting wit.

The hearing of the Senate Permanent Subcommittee on Investigations is using companies as case studies to examine the causes of the financial crisis, having previously used Washington Mutual as a study in high-risk home loans.

The panel has said it was using Goldman to probe the role of investment banks in the securitization of mortgage products and the “development, marketing and trading” of products such as collateralized debt obligations (CDOs).

The hearing quickly follows the SEC’s release of a 22-page complaint on Friday in which it charged Goldman and Tourre with fraud related to the development and marketing of a CDO.

The SEC has accused Goldman of not telling investors “vital information” about a CDO created with input from Paulson & Co, a major hedge fund that then shorted the CDO.

The panel will also hear from Goldman Chief Financial Officer David Viniar and Chief Risk Officer Craig Broderick.

Viniar has already made brief public comments on the SEC case, telling analysts on a conference call earlier this week that he is unsure how the case will unfold while insisting that most clients remain loyal.

Also scheduled to testify are the two Goldman traders credited with netting the company large profits during the subprime mortgage crisis — Michael Swenson and Joshua Birnbaum. Birnbaum is no longer with the company.

Their bets against mortgage-related products in 2007 helped the company weather the financial meltdown better than some of their peers such as Bear Stearns and Lehman Brothers, which did not survive the crisis.

Daniel Sparks, former head of Goldman’s mortgages department, will testify as well.

Goldman has vigorously denied any wrongdoing in the SEC case.

The subcommittee is expected to release a preview of its investigation into Goldman on Monday.

The witness list for Tuesday’s hearing can be found at: here