Senate probes Goldman, Deutsche: report

Flags fly outside of the Goldman Sachs headquarters building in the financial district of New York May 8, 2009. REUTERS/Lucas Jackson

(Reuters) - Goldman Sachs Group Inc and Deutsche Bank AG were issued subpoenas by a U.S. Senate panel looking for evidence of fraud in the 2008 mortgage-market meltdown, the Wall Street Journal said, citing people familiar with the matter.

The paper said the focus of the investigation is on whether internal communications show executives at the banks had private doubts on the soundness of the mortgage-related securities they were putting together.

The people told the paper Washington Mutual Inc, which is now mostly owned by JP Morgan Chase & Co, was also issued a subpoena by the U.S. Senate Permanent Subcommittee on Investigations

The paper said several other financial institutions may also have received subpoenas from the sub-committee that is headed by Senator Carl Levin.

A Goldman Sachs spokesman declined to comment on the subpoena to the paper, while Deutsche Bank did not immediately respond to a request for comment by the paper. Subcommittee investigators declined to comment to the paper.

A subcommittee subpoena raises factual questions and asks for various company correspondence, the paper said, citing a person who reviewed it.

The U.S. Senate and Goldman Sachs could not be reached for comment by Reuters after regular U.S. business hours, while a Deutsche Bank spokeswoman in Hong Kong declined immediate comment.

Reporting by Ajay Kamalakaran in Bangalore; Editing by Anshuman Daga