Goldman Sachs profits fall 82pc
Thursday, 22 July 2010
NEW YORK, July 21 (AFP): Goldman Sachs on Tuesday announced its profits slumped 82 per cent in the second quarter, hit by a massive US fraud settlement and the costs of a new British tax on bonuses.
Reporting its worst quarter since the height of the economic crisis nearly two years ago, the storied Wall Street firm said earnings were slashed on account of exceptional government payouts worth 1.15 billion dollars.
The New York-based firm set aside 600 million dollars to pay for a new British tax on executive compensation and 550 million dollars to settle US government fraud charges.
The announcement came just days after the firm agreed to pay the US Securities and Exchange Commission a record settlement for mistakenly giving "incomplete" information to clients.
The SEC accused Goldman of allowing a prominent hedge fund to design a complex financial product for clients that was designed to fail and which the hedge fund was betting against.
But Goldman's woes were not limited to strained relations with government.
Reporting net earnings of 613 million dollars, Chief Executive officer Lloyd Blankfein said the business environment had become tougher for the embattled firm.
Reporting its worst quarter since the height of the economic crisis nearly two years ago, the storied Wall Street firm said earnings were slashed on account of exceptional government payouts worth 1.15 billion dollars.
The New York-based firm set aside 600 million dollars to pay for a new British tax on executive compensation and 550 million dollars to settle US government fraud charges.
The announcement came just days after the firm agreed to pay the US Securities and Exchange Commission a record settlement for mistakenly giving "incomplete" information to clients.
The SEC accused Goldman of allowing a prominent hedge fund to design a complex financial product for clients that was designed to fail and which the hedge fund was betting against.
But Goldman's woes were not limited to strained relations with government.
Reporting net earnings of 613 million dollars, Chief Executive officer Lloyd Blankfein said the business environment had become tougher for the embattled firm.