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US Regulators Charge Goldman Sachs With Fraud

   The company, one of the world's leading financial firms, is denouncing
   allegations that it bilked investors out of more than $1 billion

   VOA News 16 April 2010

   The  U.S.  Securities  and  Exchange  Commission  (SEC) has charged on
   Goldman  Sachs  with  fraud,  accusing  the financial firm of lying to
   investors, costing them an estimated $1 billion.
   The  commission  says the company lied about securities related to the
   U.S. subprime mortgage market just as the housing market was beginning
   to falter.
   Goldman Sachs says the claims against it are "unfounded" and is vowing
   to "vigorously contest" them in court. The company's share prices feel
   sharply  on  the  New  York  Stock Exchange after the lawsuit was made
   public.
   The  SEC  says it will fine Goldman and force it to return any profits
   recieved  the  alleged  securities  fraud.  The  charges  come as U.S.
   legislator  are  trying to crack down on Wall Street, by tightening up
   rules  for similarly complex investments.  Such risky investments are
   widely  seen  to  have contributed to United States' current financial
   crisis.
   Over  the  past several years, it was not uncommon for large financial
   companies  to  package  large  numbers  of  mortgages and sell them as
   securities to investors seeking high returns with low risk.
   But the SEC says Goldman did not tell investors that a hedge fund paid
   them millions of dollars for the right to select which mortgages would
   go  into  the  securities.   The  fund  allegedly then set up complex
   transactions that would pay them well if the securities defaulted.

   Some information for this report provided by AP, Reuters or AFP.

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