Goldman Sachs has issued a lengthy rebuttal of claims by the New York Times that the bank's behavior in 2008 played a major part in American International Group's (AIG) near-collapse.
According to the article, in January 2008 Goldman Sachs became involved in a dispute with AIG related to complex mortgage security insurance.
AIG had paid $2 billion to cover potential default losses and its executives wanted some money back, stating that Goldman Sachs had overestimated how much could go unpaid.
However, Goldman Sachs officials stated the amount had actually been underestimated and demanded more money from AIG.
The dispute was not resolved but the New York Times claims that demands from Goldman Sachs damaged AIG, ultimately leading to its $180 billion bailout from the government.
"Well before the federal government bailed out AIG in September 2008, Goldman's demands for billions of dollars from the insurer helped put it in a precarious financial position by bleeding much-needed cash," said the newspaper.
"That ultimately provoked the government to step in."
It added that the Securities and Exchange Commission is now investigating Goldman Sachs' payment demands to AIG made during 2007 and 2008, and making enquiries surrounding similar demands made by a number of other companies to AIG.
The claims have provoked an angry response from the Wall Street firm, which took the step of issuing a point-by-point rebuttal of the allegations made against it.
"We requested the collateral we were entitled to under the terms of our agreements. The idea that AIG collapsed because of our marks is ridiculous," it said.
"In any event, the story later asserts that by the spring of 2008, AIG's dispute with Goldman Sachs was just one of its many woes."
The company attacked the newspaper's claims as contradictory and said that its "facts" did not stand up to serious investigation.
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