Brown called for the inquiry after saying he was “shocked” at the “moral bankruptcy” indicated in the charge.
“This is probably one of the worst cases we have seen,” Brown told the BBC’s Andrew Marr program. “It looks as if people were misled about what happened. The banks are still an issue. They are a risk to the economy.”
The move was echoed by German Chancellor Angela Merkel, who told her country’s financial regulator Bafin to ask the SEC for details on the suit.
Goldmans has vehemently denied the charge of fraud tied to collateralised debt obligations.
Royal Bank of Scotland, majority owned by the UK Government, paid $841m to Goldmans to unwind its position in the security centred on the investigation – Abacus. RBS inherited Abacus when it bought ABN Amro in 2007.
Dusseldorf-based IKB Deutsche Industriebank, which received almost €10bn in state funds during the credit crisis, was named as a purchaser of part of the CDO at issue.