Another 'Bad News Friday' For Goldman Sachs

The agony keeps on piling on Goldman, as the firm continues to take hits from all comers.

The Wall Street Journal is reporting that the US government is thought to have been probing whether Rajat Gupta, a Goldman Director who is standing down from the firm's board next month, may have tipped off Raj Rajarathnam, the man accused of orchestrating an alleged insider trading ring, about Warren Buffett's $5bn investment in Goldman before it became public in 2008.

The newspaper says that federal prosecutors notified Mr Gupta in a letter that they have intercepted telephone conversations between him and the hedge fund manager. A spokesperson for Mr Gupta has denied any wrongdoing.

In the meantime, The Journal reports that Goldman remains under fire in Germany, and that the city of Berlin has accused the firm of trying to intimidate officials with legal threats 'in order to make more profit from a housing sale'. The newspaper quotes Berlin's finance chief Ulrich Nussbaum, who said: 'I would not deal with this bank again, unless I couldn't avoid it'.

And The Financial Times reports that Goldman was an underwriter and an investor in Lloyds Banking Group's refinancing deal last year, and has been accused of restructuring the deal at the last minute in a way that 'had the effect of benefiting its position as a bond investor'.

Bloomberg has reported that some lawyers are saying that Goldman should roll over and cut a deal with the SEC on those fraud charges. The news agency quotes Thomas Hazen from the University of North Carolina at Chapel Hill, who said: 'There's a very low probability that Goldman could get the case dismissed. Every pre-trial motion the SEC wins, Goldman gets one step closer to losing'.

Finally, some good news for Goldman. Berkshire Hathaway Director Thomas Murphy told Bloomberg TV Thursday that Warren Buffett is 'not concerned with the (Goldman) investment at all.....I think he has great confidence in Goldman'.

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News