Goldman Sachs investigated by FCC and FSA

[italkcash]

Goldman Sachs, known as the most powerful bank in wall street, has come under investigation by the FCC in the USA and FSA in United Kingdom.

The bank known for its comments such as "We are doing Gods work" and to be influentional enough to be first in making money on the subprise crisis is coming under fire for the very same earning model.

CEO Lloyd Blankfein and six other company executives are to testify before a Senate subcommittee on Tuesday there likely will be talk about how the firm manages risk.

Fabrice Tourre is the only employee charged with fraud in the SEC's recent suit against the investment bank. SEC is primarilly looking into how Goldman Sachs were self-interested promoters of risky and complicated financial schemes that helped trigger the crisis, as said by the Senator Carl Levin which is leading the hearing in the senate.

"Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts," Goldman Sachs Chief Executive Lloyd Blankfein said in an e-mail dating from November 2007.

"Sounds like we will make some serious money," said Goldman Sachs executive Donald Mullen in a separate group of e-mails from October 2007 about the performance of deteriorating second-lien positions in a collateralized debt obligation, or CDO.

Goldman Sachs says it did not act against its clients' interests.

The SEC's April 16 lawsuit accuses Goldman of fraud for failing to tell clients that the debt securities they were buying had input from hedge fund Paulson & Co, which stood to benefit if the securities lost value.

There is no question that the powerful world of bankers is hit more and more by the government bodies which was unheard of before the financial crisis last year. UBS, Goldman Sachs and Lehman Brothers stood out as mastodonts and untouchable giants, now only to go through comitee hearings and lawsuits.