Goldman Sachs 'misled clients'

14 April 2011

Goldman Sachs has misled both its clients and Congress with regards to the company's bets on securities connected to the housing market, it has been claimed.

Senator Carl Levin, the chairman of the US Senate panel that looked into the causes of the financial crisis, said he would like the Securities and Exchange Commission and the Justice Department to find out whether the bank has violated the law.

Mr Levin wants to determine if Goldman Sachs acted illegally by duping clients who had purchased complex securities known as collateralized debt obligations - without being aware if the bank would gain any advantages should the value of them drop.

The institute denied that it had been untruthful with its activities and stated: "The testimony we gave was truthful and accurate and this is confirmed by the subcommittee's own report."

It was recently reported that Goldman Sachs is being sued for fraud by the co-founders of Silicon Valley chip maker Marvell Technology Group, which has accused the bank of tricking them into selling company shares.

By Claire Archer

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