Goldman Sachs, Fraud | featured news

Ex-Goldman Sachs Group Inc trader Matthew Marshall Taylor has turned himself in to federal authorities in connection with charges that he defrauded the Wall Street bank out of $118 million in 2007, two sources familiar with the matter said.

Goldman Sachs Chief Executive Lloyd Blankfein has hired Reid Weingarten, a high-profile Washington defense attorney whose past clients include a former Enron accounting officer, according to a government source familiar with the matter.

Goldman Sachs Group Inc agreed to pay $550 million to settle civil fraud charges over how it marketed a subprime mortgage product, ending months of negotiations that rattled the bank's clients and investors.

Goldman Sachs CEO Lloyd Blankfein, in written testimony prepared for a Senate hearing on Tuesday, said his firm "certainly did not bet against our clients."

A Senate investigation into the financial crisis has found that Goldman Sachs, the storied Wall Street investment bank, sought to profit from the historic decline in housing prices by betting against the US mortgage market.

Representative Barney Frank said on Monday that securities regulators' fraud case against Goldman Sachs increases the chance that financial reform will pass.

In a civil suit filed Friday, the S.E.C. accused the investment bank of securities fraud over a deal in which Goldman profited from bets against products it sold to customers.