Goldman Sachs win streak is focus of Treasury-rigging probe

Theꩲ Justice Department’s investigation into Wall Street’s rigging of the $14 trillion Treasury market is zeroing in on Goldman Sachs — just as the bank’s former employees have taken over the agency that’s at the center of the probe, The Post has learned.

Goldman S🐽achs won almost all auctions for US Treasury bonds f༺rom 2007 to about 2011, a remarkable winning streak that came despite safeguards established by the Treasury to keep bidding competitive, sources familiar with the investigation said.

At the center of the case are chats and emails believed to show Goldman traders sharing sensitive price information with traders at other banks — a sign of possible price fixing 🍸and collusion, according to sources familiar with the investigation.

𝕴“They didn’t lose many bids,” one person who ♈has seen the bid data told The Post. The prices Goldman offered for Treasury bonds “would be very close” but just above offers from other banks, and typically arrived “at the end of the auction.”

Spokespeople for Goldman and the Justice Department declined to comment. A message left for the Treaಞsury’s press office wasn’🥂t returned.

The probe’s details are becoming clearer at a time when🔯 at least half a dozen Goldman Sachs alumni are in high le𓂃vels of the executive branch. The Treasury is run by former Goldman Sachs partner Steve Mnuchin. Gary Cohn, who is now director of the president’s National Economic Council, was president of Goldman Sachs during the years when the rigging is believed to have occurred.

At least four other banks are being investigated for colluding with Goldman traders: Deutsche Bank, Royal Bank of Scotland, UBS, ꦍand BNP Paribas, a source said.

No onღe has accused any bank, or Mnuchin or Cohn, of any wrongdoin💛g.

The investigat♓ion is focusing on Goldman’s interactions with the bedrock of the US f🐠inancial system: the Treasury’s .

Those ꦬbonds, which are sold in a🌸bout 300 auctions a year, not only finance the government’s operations, but also help set rates for everything from home mortgages to credit cards.

Goldman is one of 23 primary dealers that bid directly with the government and then distribute Treasury bonds to their clients. In the auctions, those🀅 primary dealers submit secret ballots before🌱 11 a.m. for as much as 35 percent of the share of the offering. The bank with the highest bid wins.

Specifics of the auc🍎tion bids are a closely held secret. Last year, Treasury denied The Post’s Freedom of Information Act request for data going back to 2000 on the grounds that it was “protected from disclosure as confidential commercial or financial information.”

Treasury did release partially redacted data on ﷽auction bids that had been changed — a potential sign of manipꦗulation — but the documents don’t identify the bidder or the price paid.

Officials at Treasury were aware of Goldman’s disproportionate winning streak at the tim🦹e — but they assumed that the bank was just better at pricing the bonds, one person who’s familiar witཧh the bid data told The Post.

Treasury officials, however, were aware that other major inv💯estors, including some central banks, had concerns that banks were front-running their own customers in order to make more money off them.

“There had been some nervousness on the part of large buyers,” the person said. “They ♓were worrie🐠d about being front-run sometimes.”

That concern contributed to a surge in direct bidders — investors who bypass the bank and 𒊎try to get a chunk of the bonds through the auction process — around 2010, the source said.

At the time, big investors wanted “to put their money to work in the government-bond market without revealing their inten🌠tions to the primary dealers,” noted a January 2010 Wall Street Journal article about the rise in direct bidders.

“When you see a surge in direct bidders, you have to aꦦsk what i🎉t means,” the person said.

The investigation has spurred a class-action la⛄wsuit in Manhattan federal court led by a Cleveland pension fund against♚ the 22 primary dealer banks.

After The Post ✃first broke news of the investigation in June 2015, primary dealers changed how they bid o🐈n auctions, according to the suit.

At t꧂he time that the rigging is believed to have happened, Cohn was the No. 2 person at Goldman, behind CEO Lloyd Blankfein. In Cohn’s position as president and co-chief operating officer — a position he later ran by himself — he oversaw the unit of the bank that submitted the bids to Treasury.

The DOJ, which started the investigation in June 2015, is still in the middle stages of its prob💝e, sources said.

While the Justice Department conducts all of its investigations in secret, peo♓ple familiar with the probe told The Post that the DOJ is more tඣight-lipped than usual in this case.

Last month, when the DOJ sent subpoenas to RBS, UBS, and BNP Paribas, for instance, some investigators conducting parallel probes at other agencies found out about it through press reports, one source said. Some agencies had already obtained the messages sought by the DOJ earlier, the pꦇerson said.

BNP Pariba🔥s, Deutsche, RBS and UBS have p💝reviously declined to comment on the investigations.

Officials at the Treasury under the former secretary, Jacob Lew, found the investigation highly embarrassing, and pressed for a quick resolution of the prob♌e.

DOJ investigators are aware of the sensitivity of the investigation, another source to🥂ld The Posꦿt.

At least four other agencies — the Securities and Exchange Commission, the Commodity Futures Tr🧔ading Commission, and the New York Department of Financial Services, as well as the European Commissioꦬn — are looking into the alleged rigging.