Business News
Goldman shares plummet amid reports of criminal probe
Apr 30, 2010, 18:40 GMT
Washington - Shares of Goldman Sachs slumped on Friday amid reports that the under-fire investment bank faced a criminal probe into its mortgage dealings ahead of the 2008 financial crisis.
The banking giant's stock price was down more than 8 per cent in New York trading after Bloomberg News reported late Thursday that federal prosecutors in New York were looking into filing fraud charges.
Goldman already faces a civil fraud suit filed earlier this month by the Securities and Exchange Commission. The US regulator charges that Goldman misled clients, colluding with a hedge fund to bet against mortgage products that were sold as a good deal to other investors.
Goldman Sachs chief executive Lloyd Blankfein was forced to defend the bank's conduct during a testy Senate hearing earlier this week. He denied that the investment bank misled investors or profited from the collapse of the US sub-prime housing market.
Blankfein defended the firm's practice as prudent decision-making to protect its interests and said it did not excessively engage in short betting against its own mortgage security products.
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