Goldman Sachs Sued by SEC for Fraud

The government has accused Goldman Sachs & Co. of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering. The Securities and Exchange Commission said in a civil complaint Friday that Goldman failed to disclose that one of its clients helped create -- and then bet against -- subprime mortgage securities that Goldman sold to investors. Investors in the mortgage securities lost more than $1 billion, the SEC said. The agency is seeking to recoup profits reaped on the deal. Goldman Sachs denied the allegations. In a statement, it called the SEC's charges "completely unfounded in law and fact" and said it will contest them. The charges are a blow to the reputation of the most powerful firm on Wall Street, which earned a record $4.79 billion last quarter and has long profited from high-octane trading.

• 2010-04-16T17:04:34+00:00
• Duration: 02:35

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Goldman Sachs Fraud SEC financial subprime mortgages Group Stock News CEO Blankfein Jews Jewish Crooks Scam SEC Market toxic debt economy recession