New York: Goldman Sachs Group Inc, facing fraud charges from US securities regulators, on Monday warned that more litigation and investigations could be coming.
Goldman, in a quarterly regulatory filing, disclosed a number of probes and reviews that could be damaging to Wall Street’s most influential firm.
It said it anticipates additional shareholder actions and other investigations related to its offerings of collateralized debt obligations, which are at the heart of Securities and Exchange Commission charges against the firm.
Goldman shares have tumbled more than 20% since the SEC accused the bank on 16 April of failing to tell investors who bought risky debt tied to subprime mortgages that hedge fund manager John Paulson helped select the underlying portfolio for a mortgage-linked security and was shorting the deal.
Goldman, in its filing on Monday, said the SEC case “could result in collateral consequences to us that may materially adversely affect the manner in which we conduct our businesses.” Namely, certain outcomes could impact the firm’s ability to act as broker-dealer or provide certain advisory and other services to US registered mutual funds, it said.
Goldman, criticized for not disclosing it had received notice last year of the likelihood of SEC charges, disclosed several investigations on Monday, including probes by the Financial Industry Regulatory Authority and the UK’s Financial Services Authority related to CDO offerings and related matters.
The bank said it is cooperating with a number of investigations and reviews into its sales and trading operations as well as inquiries into the financial crisis, including transactions with American International Group Inc, Bear Stearns and Lehman Brothers.
It also disclosed that it is subject to inquiries related to its transactions with the government of Greece, including financing and swap transactions.