Goldman Sachs’ (GS) Problems Continue

Following a lawsuit filed by the SEC, Goldman Sachs GS has found itself cornered. The Wall Street giant has continued to battle against charges of betting against its own clients. The New York Times has now reported another case where the bank was betting against its own client’s interest. The client in this case is failed bank, Washington Mutual WAMUQ. It may be recalled that Washington Mutual was seized by federal regulators in September 2008. Washington Mutual was a longtime Goldman client. Goldman packaged and sold the mortgages originated by Washington Mutual. However, Goldman was aware of the trouble at Washington Mutual. Apparently, Goldman was betting against Washington Mutual by going short on its stock. This was happening even as the Wall Street firm was underwriting mortgage related securities for Washington Mutual. According to documents recently released by Congress, the bets placed by Goldman against its own client were large enough to generate at least $10 million in profit.