On the news of SEC's charges, shares of Goldman Sachs & Co. fell 12.8 percent, a loss of $12 Billion in market value. The news also impacted the broader markets, putting an end to a six-day U.S. stock market rally, and causing the European markets to slump.
Founded in 1869, Goldman Sachs is currently the largest investment banking firm in the United States. Commentators believe that although Goldman Sachs may be able to defend itself against SEC charges, the damage to the company's image may allow Morgan Stanley, the second position U.S. investment banking firm, and foreign rivals such as Deutsche Bank and UBS to take on a portion of Goldman Sachs' market.
British Prime Minister Gordon Brown, and German government spokesman Ulrich Wilhelm said their governments will seek information from the SEC about Goldman Sachs Group's operations; the investigations may lead into legal action in those jurisdictions.
The materials for this blog were gathered from various sources including The Associated Press, Business Week, and Reuters. For additional information, run a search on Google.
Robin Mashal is a Los Angeles business attorney, and a partner at the law firm of Hong & Mashal LLP. He can be reached by phone at (310) 286-2000.