Goldman Sachs Group Inc showed how its trading operations are stronger
than ever, but warned that more litigation and investigations loom.
Goldman, in a quarterly regulatory
filing, said it made it through the first quarter without a single day of
trading losses, the first time it had accomplished such a feat. The firm
reported trading revenue of more than $100 million on 35 days in the quarter.
In the same filing, Goldman said it
still faces a number of probes and reviews, which could be damaging.
It said it anticipates additional
shareholder actions and other investigations related to its offerings of
collateralized debt obligations, which are at the heart of charges against the
firm filed by the Securities and Exchange Commission.
Goldman shares have tumbled more
than 20 per cent 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 the security
and was shorting the deal.
Goldman, in its filing, said the
SEC case “could result in collateral consequences to us that may
materially adversely affect the manner in which we conduct our
businesses.” It said certain outcomes could impact the firm’s ability to
act as broker-dealer or provide certain advisory and other services to
U.S.-registered mutual funds.
The Wall Street Journal reported
last week that Goldman had begun settlement talks with the SEC.
For the past year, Goldman has
faced a backlash over its quick rebound from the financial crisis, while
benefiting from various government bailout programs, and its bonus pool, which
topped $16 billion last year.
Goldman, which reported record
profit in 2009, has been trying to live down a Rolling Stone article last year
that labelled the firm a “giant vampire squid wrapped around the face of
Its blockbuster trading performance
in the first quarter, coupled with the SEC charges, could heighten the public
furore surrounding the firm, which has been cast as profiting from the subprime