Under-fire Goldman Sachs reveals 90% jump in profits | Business. The under-fire Wall Street bank Goldman Sachs faced a fresh barrage of public and political outcry today as it revealed a 90% leap in profits in spite of accusations of dishonesty in its dealing with clients, raising the spectre of multimillion dollar bonuses at the height of a battle in Washington over regulatory reform.
Just days after US regulators began a $1bn (£650m) fraud action against the firm, Goldman revealed a leap in quarterly profits from $1.8bn to $3.5bn and disclosed that it was setting aside $5.49bn to pay its employees. A top lawyer at the bank rebutted the Securities and Exchange Commission's prosecution, insisting Goldman had not misled its clients and describing the case as a "he says, she says" dispute.
Goldman's figures were given short shrift by the White House, which is preparing for a fresh push on Wall Street on Thursday when Barack Obama will visit New York to deliver a speech pressing the case for a crackdown on the financial industry. Magnetar CDOs Had Better Disclosure Than Goldman, SEC Told Bank. Goldman Sachs e-mails show bank sought to profit from housing do. As the U.S. housing market began its epic fall nearly three years ago, top executives at Wall Street powerhouse Goldman Sachs cheered the large financial gains the firm stood to make on certain bets it had placed, according to newly released documents.
The documents show that the firm's executives were celebrating earlier investments calculated to benefit if housing prices fell, a Senate investigative committee found. In an e-mail sent in the fall of 2007, for example, Goldman executive Donald Mullen predicted a windfall because credit-rating companies had downgraded mortgage-related investments, which caused losses for investors. "Sounds like we will make some serious money," Mullen wrote. Goldman admits it had reduced its exposure to the overheated U.S. property market and had sought to limit possible losses through a strategy that would make money if home prices fell. Obama sharply rebuked Wall Street in his radio address Saturday.