The legal fallout from the sub-prime crisis in the United States continued yesterday as Goldman Sachs conceded for the first time that it was the target of legal action and the FBI opened an investigation into 14 companies involved in America’s mortgage bond industry.

Morgan Stanley revealed yesterday that it, too, was the subject of new lawsuits, relating to the bank’s role in underwriting secondary share offerings for New Century Financial and Countrywide, the US mortgage lenders.

Goldman Sachs reported in its annual report, published yesterday, that it had received requests from regulators for information relating to high-risk sub-prime mortgages and related investment products that it had helped to package, such as collateralised debt obligations, which are pools of bonds and other asset-backed securities.

One case involving Goldman is being led by Andrew Cuomo, the New York attorney-general, who has issued subpoenas to the main Wall Street firms as he seeks to determine whether they knew more about the risks of sub-prime mortgage bonds than they let on.

Mr Cuomo’s case received a boost over the weekend when Clayton Holdings, which conducted due diligence for the banks on many of the home loans that they packaged into bonds, agreed to provide evidence in exchange for immunity from prosecution. Goldman Sachs said that it was cooperating with the requests, which came from “various governmental agencies and self-regulatory organisations”.

Goldman Sachs is also among the 21 Wall Street firms being sued by the city of Cleveland, Ohio, which claims that they encouraged mortgage lenders to keep making loans to people who could not afford them by buying them and packaging them into bonds.

The FBI would not name the 14 companies it was investigating as part of a wide-ranging inquiry into the sub-prime mortgage crisis. However, it said that they include mortgage lenders, the investment banks that package home loans into bonds, and the Wall Street firms that ended up owning some of them, but not disclosing their dangers to shareholders.

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