The news that the Justice Department is conducting a criminal investigation of Goldman Sachs (NYSE: GS) was initially greeted with the view that it will not likely bring charges. That view was grounded in the assumption that it was looking into the same matter that the SEC (SEC news) was looking into when it brought civil charges related to a single CDO (CDO news). It did seem that with the higher bar criminal prosecutors face--"beyond a reasonable doubt" vs. "a preponderance of evidence"--a criminal complaint would be a harder road.

But then came the news that the Justice Department probe has been going on for a lot longer than initially thought, and was casting a wider net. So it may be that it's looking at bringing charges in different areas. A criminal case of course is a much bigger deal and has created a lot more uncertainty. And that has tanked the stock. We have no idea what the prosecutors are zeroing in on, if anything, but you would have to think that trading of derivatives is somehow a focus. 

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