Goldman Sachs Group, facing fraud charges preferred by US securities regulators, yesterday warned of the possibility of more litigation and investigations that could damage Wall Street's most influential firm.
It said it expects additional shareholder actions and more investigations related to its offerings of collateralised debt, which are at the heart of the Securities and Exchange Commission's charges against it.
Goldman shares have tumbled more than 20% since the commission accused it 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 said the commission's case "could result in consequences that may materially adversely affect the manner in which we conduct our businesses."
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