Goldman Sachs’ SEC Battle Still On

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NEW YORK (GaeaTimes.com)- Goldman Sachs Group Inc, the New York based Investment banking and securities firm has come into the highlights after SEC sued it for misinforming its investors about a potentially risky hedge fund. The US Securities and Exchange commission had slapped a lawsuit on the investment banking giant a few days back. The SEC alleged that the fishy behavior of the entity made the investors lose a lot of their money. Unwilling to take things lying down, Goldman Sachs has started defending its stance over the issue. The bank recently got in touch with its Japanese clients to inform them that the controversial collateralized debt obligation on which the lawsuit is based, was not sold in Japan. Hiroko Matsumoto, a spokesperson for the investment banking giant affirmed the news but declined to say how the clients have reacted.

The market went into a shock when the SEC slapped the lawsuit on Goldman Sachs. The lawsuit is making its presence felt in other countries as well. Gordon Brown, the Prime Minister of UK has given order to the country’s Financial Services Authority to begin a probe as the suit is liable to affect the overseas operations of Goldman Sachs.

The SEC has made the accusation that Goldman Sachs sold the CDO at a time when the Wall Street turmoil started affecting the US economy. Moreover, the CDO was related to risky subprime mortgages which the entity reportedly hid from the investors. SEC however, has not accused the hedge fund in this case. Goldman Sachs is preparing its legal defense now.