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ISCOVER
By: Jessica Darnbrough
The reputation of international investment bank Goldman Sachs has come under fire, after the US Securities and Exchange Commission (SEC) filed civil fraud charges against the bank.
It is alleged the bank and one of its executives failed to disclose a conflict of interest, and arranged mortgage investments without telling clients that the portfolio was put together with help from a hedge fund that was betting on them to fail.
The bank’s chief executive officer Lloyd Blankfein is expected to tell a US Senate hearing today that the firm did not mislead clients, and repeat the firm's argument that it lost US$1.2bn ($1.3bn) in the housing mortgage market during 2007 and 2008.
"If our clients believe [the charges] we don't deserve their trust, we cannot survive," Mr Blankfein said.
He also acknowledged that "we have to do a better job of striking the balance between what an informed client believes is important to his or her investing goals and what the public believes is overly complex and risky."
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