Goldman's Tim Leissner pleads guilty to money laundering

• Tim Leissner, a former Goldman Sachs star banker who led the bank’s investment business in Asia, is facing up to 10 years in prison and a lifetime ban from capital markets for his involvement in the 1Malaysia Development Berhad (1MDB) scandal, an elaborate cross-border financial fraud that involved the embezzlement of $4.5 billion from Malaysia’s government fund, 1MDB, between 2009 and 2014.
• Leissner — who is a German national living in America — is free on bond as he awaits sentencing on the federal charges he pleaded guilty to last month. 

(L-R) Russell Simmons, Shannon Elizabeth, Kimora Lee Simmons, and Tim Leissner attend The Weinstein Company & Netflix's 2014 Golden Globes After Party presented by Bombardier, FIJI Water, Lexus, Laura Mercier, Marie Claire and Yucaipa Films at The Beverly Hilton Hotel on January 12, 2014 in Beverly Hills, California. 

Kimora Lee Simmons' current husband Tim Leissner has been charged with money laundering , after the theft of billions of dollars from 1MDB, a Malaysian sovereign wealth fund. Leissner is a former Goldman Sachs partner in Asia who has plead guilty and agreed to forfeit $43.7 million.

The two other people involved include Roger Ng, who is also a former Goldman employee and Malaysian businessman Jho Low. Around $4.5 billion was incorrectly managed from 1MDB fund officials and their associates, which include Leissner along with his accomplices between 2009 and 2014, the DOJ has alleged. Court documents highlight more than $200 million alone went to Leissner and another alleged co-conspirator.

Kimora Lee Simmons' current husband Tim Leissner and her 4 kids

Once the charges were initially filed in 2017, Kimora spoke out and said she and her husband’s finances aren’t connected when it comes to her business endeavors, according to WWD. “I fund my own business. So all my money, not that I want to say it that way, this is my third marriage that I’m on so, no, my husband has nothing to do with my professional life,” Simmons told the publication. At the climax of Leissner’s involvement with 1MDB, The Wall Street Journal reported he earned more than $10 million a year, according to people familiar with the matter.

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Investigations into the $11 billion Malaysian sovereign fund were first reported in July 2015 by a pair of Wall Street Journal reporters, Tom Wright and Bradley Hope, after a Malaysian parliamentary committee noticed unusual transactions between the state fund and Razak’s personal bank account. Razak, who was then prime minister, as well as 1MDB’s board chairman, was believed to be the central figure involved in a series of financial frauds surrounding the fund.

Former Malaysian Prime Minister Najib Razak (you might recognize him as the spokesperson for Malaysia during the intense media coverage of missing flight MH370 in 2014), who recently lost power in an election, was arrested by Malaysia’s anti-graft authorities over his alleged embezzlement of nearly $700 million from the  1MDB.

Former Malaysian prime minister Najib Razak (C) arrives for a court appearance in Kuala Lumpur, Malaysia on July 4, 2018.


Leissner, Kimora Lee Simmons, Prime Minister Najib Razak and Tan Sri Azman in September 2013

The real mastermind behind the 1MDB scandal was Jho Low, a 36-year-old Chinese Malaysian financier whose only known connection to 1MDB was a hollow title called “special advisor.”

Low is the main character of Wright and Hope’s new book, Billion Dollar Whale, in which the two journalists consolidated their findings from three years of investigative reporting on the 1MDB saga into a nonfiction crime thriller about one of the largest financial heists in history.

Jho Low at Angel Ball 2014 hosted by Gabrielle’s Angel Foundation at Cipriani Wall Street on October 20, 2014 in New York City.

In 2009, Low—an unremarkable 26-year-old Wharton graduate who’d just returned to Malaysia—managed to persuade the country’s prime minister (Razak) to form a government investment fund and subsequently enlisted Goldman Sachs to help the fund raise $6.5 billion in debt from global financial markets. Over the six years between 1MDB’s inception and the beginning of a governmental probe, Low moved money from the fund into his personal bank account regularly, under the disguise of sovereign investments, and spent it on lavish parties in Hollywood, where Low bought his way into friendships with the world’s most famous actors and models, including Leonardo DiCaprio (Low financed DiCaprio’s 2013 hit film The Wolf of Wall Street with stolen money), Britney Spears, Miranda Kerr and Paris Hilton.

In 2012 and 2013, Goldman Sachs made $600 million in fees and commissions from three rounds of bond issuance for 1MDB, raising over $6.5 billion in government debt.

At this time, Low remains an international fugitive, who’s being pursued by Malaysian and American officials.  Low is reportedly hiding somewhere in China.

Jho Low reportedly paid $250 million for the “Equanimity” vessel in 2014 with Malaysian government funds. 

The 300-foot-long luxury yacht has been put up for sale by the Malaysian government for a minimum price of $130 million, a steep discount from the $250 million that Low allegedly paid for it in 2014.

Low’s ex-girlfriend, supermodel Miranda Kerr, was once seen on the “Equanimity” shortly after Low’s purchase.

Jho Low / Miranda Kerr 

July 2017: Miranda Kerr handed over $11 million worth of jewels from her Los Angeles safe deposit box to US government agents. Among the jewels Kerr handed over, according to The Wall Street Journal, was a 11.72 carat heart-shaped diamond pendant, a Valentine's Day gift in 2014 from Low.
The gifts to Kerr, who dated Low for a year, are just part of more than $1.6 billion worth of assets — including property, art, jewels, the yacht and even a jet — that the US Justice Department is now trying to recover.

Low spent millions to fly around the world with Leonardo DiCaprio and to gamble with him.

DiCaprio announced through a spokesman that he was returning more than $13 million worth of art given to him by a Hollywood production company, Red Granite, which is connected to Low and which funded the actor’s 2013 movie “The Wolf of Wall Street.”

Red Granite was co-founded by Riza Aziz, the stepson of Malaysian Prime Minister Najib Razak, and Joey McFarland, a former party booker for Paris Hilton.

The US government charges that the Hollywood production company was founded on money stolen from the Malaysian development fund 1MDB.

More than $4.2 million of the stolen money was used to buy original movie posters, including one for 1939’s “The Wizard of Oz” and another, worth $1.2 million, for the 1927 film “Metropolis.”

Aziz plastered his New York condo, also bought with stolen cash, with the posters.

He also gave some as gifts to DiCaprio — who has not returned them — and to Martin Scorsese, director of “The Wolf of Wall Street.”

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“Dr Tim Leissner”

Leissner was sometimes billed as “Dr Tim Leissner” at speaking events and his official Goldman biography listed a doctorate in business administration from the University of Somerset.

• While an institution of that precise name does not appear to exist, one called Somerset University was fined in the UK in 1992 for selling unrecognized degrees.
• A retired US FBI agent testified to a 2004 Congressional hearing on “diploma mills” that Somerset University had once offered to deliver him an MBA within 15 days, complete with grade point average and professorial letters of recommendation, for $1,995. The agent said the Somerset University representative told him the degree was for “professional purposes, to get pay raises, and promotions”.

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Update 17 Dec 2018

Ng Chong Hwa, Low Taek Jho and Tim Leissner (from left to right). 

Malaysia filed criminal charges on Monday against Goldman Sachs and two of its former employees over the alleged theft of billions of dollars, heaping fresh pressure on the Wall Street titan over the 1Malaysia Development Berhad (1MDB) scandal.

Goldman subsidiaries and ex-bankers Tim Leissner and Ng Chong Hwa are accused of misappropriating $2.7 billion, bribing officials and giving false statements in relation to bond issues they arranged for state fund 1MDB.

Allegations that huge sums were looted from the investment vehicle and used to buy everything from yachts to artwork, in a fraud that involved former Malaysian leader Najib Razak, contributed to the last government’s shock defeat at May elections.

Both former Goldman employees had already been charged over the scandal in the US last month, with Leissner pleading guilty while Ng was arrested in Malaysia. Low Taek Jho, a fugitive Malaysian financier accused of masterminding the fraud, was also hit with new charges.

Malaysia’s new Prime Minister Mahathir Mohamad, who came to power in part on a pledge to investigate the 1MDB scandal, has been taking an increasingly tough line against Goldman and has accused the bank of having “cheated” the country.

A steady stream of negative news concerning the scandal has come out of the US, focusing on the great lengths the bank went to in courting 1MDB.

It emerged last month that former Goldman chief Lloyd Blankfein met with Jho – commonly known as Jho Low – at a reception in 2009 hosted by Najib at a hotel in New York.

Since his election defeat, Najib has been arrested and hit with dozens of charges over the scandal and is likely facing a long jail term.

Malaysian strategic development company 1MDB was set up in 2009 with the ostensible aim of developing the economy, with its work overseen by Najib.

But the US Department of Justice, which is seeking to seize back assets in America allegedly bought with stolen 1MDB money, estimates that $4.5 billion was looted from the fund by high-ranking officials and their associates.

Goldman Sachs’s (GS) golden cross

The bullish “golden cross” pattern that surfaced in Goldman Sachs’s stock chart Wednesday could bode rather well for investors in the coming months, especially since the stock also appears to have reversed a five-year trend of underperformance against the S&P 500 at the same time.

A “golden cross” refers to when a stock’s 50-day moving average rises above the 200-day moving average. Many chart watchers say these bullish moving-average crossovers mark the spot that a short-term rally transitions to a long-term uptrend.

Although that’s the first golden cross in nearly two years, they aren’t too uncommon, as there have been seven previous appearances over the past 10 years. What’s relatively rare, however, is when they actually work as buy signals.

Of the previous seven, only the ones that appeared in September 2012, May 2009 and August 2005 provided good entry points to ride sustainable longer-term rallies. Those golden crosses preceded gains of 37% over five months, 38% over five months and 46% over eight months, respectively, before the stock started corrections of at least 10%.

A common theme of those three golden crosses were that Goldman’s shares were simultaneously ending long-term relative-performance downtrends when compared with the S&P 500.

And currently, RBC Capital technical analyst said he sees a “potential long-term trend reversal developing” in Goldmans’ stock relative to the S&P 500.

The $1 billion fraud trial of 'Fabulous Fab' Tourre

• Former Goldman Sachs trader Fabrice Tourre was found liable for misleading investors in mortgage security, delivering a big win for the SEC. 
•  Critics have accused regulators of making fairly junior employees like Mr. Tourre scapegoats for Wall Street’s wider failings.

After two days of deliberations, jurors in downtown Manhattan found a Goldman Sachs (GS) banker liable in one of the highest-profile cases to arise from the financial crisis. They found former Goldman VP Fabrice Tourre liable on six of the seven claims of misleading investors in a $1 billion bubble-era mortgage security. It’s a huge victory for the Securities and Exchange Commission, which brought the case, and in a way it also marks a success for the presiding judge, Katherine Forrest, who fought hard to ensure the jurors would understand the complexities of the charges.

Fabrice Tourre

 A former vice president on Goldman’s structured product trading desk in New York, he is accused by the SEC of misleading investors about a mortgage deal gone bad (a complex financial transaction known as a synthetic collateralized debt obligation, or CDO). He has referred to himself by a nickname given to him by a colleague, “the fabulous Fab.” He’s now pursuing a doctorate in economics at the University of Chicago. 

In a surprise move, lawyers for Fabrice Tourre decided not to call any witnesses, as the Securities and Exchange Commission and defense rested their cases. Just one day later, on Aug. 1, 2013, he was found liable for six of seven charges. 

Samuel Sachs & Marcus Goldman

Samuel Sachs (July 28, 1851 – March 2, 1935) was an American investment banker. He was born in the state of Maryland to Jewish immigrants from Bavaria, Germany.  Sachs, along with his longtime friend Philip Lehman of Lehman Brothers, pioneered the issuing of stock as a way for new companies to raise funds.

He married Louisa Goldman, the youngest daughter of close friends and fellow Bavarian immigrants. Sachs then joined his father-in-law Marcus Goldman's firm which prompted the name change to Goldman Sachs in 1904. Together they underwrote securities offerings for such large firms as Sears, Roebuck and Company. During this time Goldman Sachs also diversified to become involved in other major securities markets, like the over-the-counter, bond, and convertibles markets which are still a big part of the company's revenue today. Sachs retired in 1928 and died in 1935.

Marcus Goldman (December 9, 1821 – July 20, 1904)
Goldman came from an Ashkenazi Jewish family, the son of Ella and Wolf Goldmann, a former schoolteacher and cattle dealer. He immigrated to the United States from Frankfurt am Main, Germany, in 1848 during the first great wave of Jewish immigration to America, resulting from the Revolutions of 1848 in the German states.

 Upon arriving in America, he worked as a peddler with a horse-drawn cart and later as a shopkeeper in Philadelphia. There, Goldman met and married eighteen year old Bertha Goldman (no relation), who had also emigrated from Germany in 1848. In 1869, with his wife and five children, Goldman relocated to New York City and hung out a shingle on Pine Street in lower Manhattan, with the legend Marcus Goldman & Co., setting himself up as a broker of IOUs.

 From his earliest days of his business, Goldman was able to singlehandedly transact as much as $5 million worth of commercial paper a year. Successful though he was, Goldman's business was insignificant compared to that of the other Jewish-German bankers of the day. Concerns like J. & W. Seligman & Co., with working capital of $6 million in 1869, were already modern-day investment bankers immersed in underwriting and trading railroad bonds. Goldman's youngest daughter, Louisa, married Samuel Sachs, the son of close friends and fellow Lower Franconia, Bavaria immigrants. Louisa's older sister and Sam's older brother had already married.

 In 1882, Marcus Goldman invited his son-in-law Samuel to join him in the business and changed the firm's name to M. Goldman and Sachs. Business boomed—by 1880 the new firm was turning over $30 million worth of paper a year—and the firm's capital was now $100,000, all of it the senior partner's.

 For almost fifty years after its inception, all of Goldman Sachs's partners were members of intermarried families. In 1885, Goldman took his own son Henry and his son-in-law Ludwig Dreyfuss into the business as junior partners and the firm adopted its present name, Goldman Sachs & Co. In 1894, Henry Sachs entered the firm, and in 1896, the firm joined the New York Stock Exchange. When Marcus Goldman retired, he left the firm in the hands of his son Henry Goldman and his son-in-law Samuel Sachs. In 1904, two of Sam Sachs's sons, Arthur and Paul, joined the firm straight out of Harvard University. In the summer of 1904, Marcus Goldman died. From humble beginnings, the institution he left behind would soon become a full-service investment bank. With the advent of underwriting, coupled with the extensive lending, foreign exchange, and trading operations, the structure of Goldman Sachs was in place. Although much smaller and less sophisticated, it was already recognizable as the firm it would become.

Goldman Gives Blankfein a $5.4 Million Cash Bonus; $19 Million in Compensation for 2010

Lloyd C. Blankfein, the chief executive of Goldman Sachs, received $19 million in compensation for 2010, including his first cash bonus since the 2008 financial crisis, according to a regulatory filing from the firm late Friday.

His 2010 payday includes a $5.4 million cash bonus and other previously reported awards including $12.6 million in restricted stock, $600,000 salary and $464,067 in other benefits. Mr. Blankfein received $9.8 million a year earlier; all but $800,000 of that amount came in restricted stock.

Regulatory filings also show that Mr. Blankfein received an additional $27.2 million in 2010 from investments he has in funds managed by Goldman.

Mr. Blanfkein was one of at least five senior Goldman executives, including the firm’s president, Gary D. Cohn, to receive a $5.4 million cash bonus.

Prosecutors Seek 10-Year Prison Term for ex Goldman Sachs Programmer

(Bloomberg) Former Goldman Sachs Group Inc. (GS) computer programmer Sergey Aleynikov should get as much as 121 months in prison for stealing the firm’s computer source code, U.S. prosecutors said in a court filing.

Aleynikov, convicted in December of violating the Economic Espionage Act and the Interstate Transportation of Stolen Property Act, has asked to be given probation when he is sentenced by U.S. District Court judge Denise Cote on March 18. Prosecutors cited Aleynikov’s alleged history of violating intellectual property laws, asking Cote to sentence him to 97 to 121 months.

“Aleynikov was simply a thief motivated by greed, someone who sought to benefit from the valuable intellectual property of his employer to make money for himself and his new company,” prosecutors said in a sentencing memorandum filed in Manhattan federal court March 11.

On Feb. 24, Cote ordered Aleynikov, who had been free on bond, jailed before sentencing because she deemed him a flight risk. Aleynikov, who is a naturalized U.S. citizen, holds dual U.S.-Russian citizenship, said his attorney Kevin Marino.

The case is U.S. v. Aleynikov, 1:10-cr-00096, U.S. District Court, Southern District of New York (Manhattan).

Goldman Sachs Profit Drops 52% on Trading Decline

(Bloomberg) -- Goldman Sachs Group Inc.’s earnings dropped 52 percent as revenue from trading and investment banking declined, concluding the fourth-best year for profits in the firm’s history.

Fourth-quarter net income fell to $2.39 billion, or $3.79 a share, in the three months ended Dec. 31, from $4.95 billion, or $8.20, a year earlier, the New York-based company said today in a statement. Estimates of 22 analysts surveyed by Bloomberg averaged $3.79 per share, and ranged from $3 to $4.31.

Chief Executive Officer Lloyd C. Blankfein, 56, worked to maintain Goldman Sachs’s profitability and reputation last year as client-trading revenue dropped 33 percent from a record in 2009 and the bank settled a civil fraud lawsuit filed by a U.S. regulator. Last week Goldman Sachs released a set of new business practices and changed its financial reports to separate client-trading revenue from gains and losses generated by bets with its own money.

“I’m hugely confident of their ability to make money one way or another,” Benjamin Wallace, an analyst at Grimes & Co. in Westborough, Massachusetts, which manages about $1 billion, said before the results were released. Still, “the big trends which were a help in ‘09 certainly softened a lot in 2010” in trading, Wallace said.

Profit for the year fell 38 percent to $8.35 billion, or $13.18 per share.

Shares Decline

Shares of Goldman Sachs declined to $170.15 at 8:13 a.m. in New York from $174.68 at the close on the New York Stock Exchange yesterday. They gained 3.9 percent this year through yesterday.

Goldman Sachs’s full-year revenue fell 13 percent to $39.2 billion in 2010 from $45.2 billion in 2009, the firm said. Compensation and benefits, the bank’s biggest expense, decreased 5 percent to $15.4 billion from $16.2 billion as the number of employees rose 10 percent from a year earlier to 35,700.

Fixed-income traders had a tougher time making money in 2010 as volume fell and prices improved at a slower pace from the previous year. The extra yield investors demanded to own investment-grade debt instead of Treasuries tumbled 414 basis points in 2009 to end the year at 190 basis points, the biggest annual drop in Bank of America Merrill Lynch index data beginning in 1996. In 2010 spreads narrowed 24 basis points, the data show. A basis point is 0.01 percentage point.

JPMorgan, Citigroup

Fourth-quarter earnings reports from JPMorgan Chase & Co. and Citigroup Inc., the second- and third-biggest U.S. banks by assets, showed that fixed-income trading revenue fell compared with the prior quarter and for 2010 as a whole. Average weekly trading volume in corporate debt dropped 11 percent in 2010 from 2009, according to Federal Reserve data.

Fixed-income, currencies and commodity trading revenue, known as FICC, accounted for more than half of Goldman Sachs’s overall revenue in 2009 under the firm’s old financial reporting system. That fell to 48 percent in the new disclosure, which moves revenue from some businesses to other divisions, according to a company filing last week.

Under the new reporting structure, fourth-quarter FICC revenue fell 48 percent from a year earlier to $1.64 billion, bringing the revenue total to $13.7 billion for the year. Equities-trading revenue decreased 5 percent to $2 billion in the quarter and totaled $8.09 billion in the year.

Investing and Lending

Gains from what the company now calls investing and lending, which includes stakes in companies such as Industrial & Commercial Bank of China Ltd. as well as real estate and proprietary trading, rose 45 percent to $1.99 billion in the fourth quarter from a year earlier and totaled $7.54 billion in 2010 compared with $2.86 billion in 2009.

Revenue from asset management climbed 14 percent to $1.51 billion in the fourth quarter from a year earlier and totaled $5.01 billion for the year, up from $4.61 billion in 2009. Investment-banking revenue decreased in the fourth quarter to $1.51 billion and was $4.81 billion in the year, down from $4.98 billion in 2009.

Goldman Sachs’s investment bank and money-management divisions have been in the spotlight this month after the firm and some of its funds invested $450 million in closely held Internet social networking site Facebook Inc. and tried to sell $1.5 billion of the company in a private placement to wealthy clients. On Jan. 17, the firm said it would restrict the sale to clients outside the U.S. on concern media coverage of the deal would run afoul of rules governing private offerings.

“You’re going to have a bunch of questions about Facebook,” said Anton Schutz, president of Mendon Capital Advisors Corp. in Rochester, New York, which has more than $200 million under management. “The pipeline for deals should matter a lot.”

Goldman Sachs said today that its investment-banking transaction backlog decreased compared with the end of the third quarter.

Ex-Goldman Programmer Is Guilty in Code Theft

(wsj.com)A former Goldman Sachs Group Inc. computer programmer was convicted Friday of stealing the confidential source code of the investment bank's high-speed trading system.

High-speed trading and other financial firms aggressively protect their code, considering it a trade secret and a competitive advantage. Goldman required employees to sign a confidentiality agreement as part of their employment and that any software developed by them in their jobs were the property of the investment bank.

Sergey Aleynikov's conviction is the second guilty verdict in as many months involving the theft of high-speed trading code. Last month, Samarth Agrawal, a former Société Générale trader, was convicted of stealing the bank's high-frequency trading code after he freely admitted to sharing aspects of the bank's computer code with a rival.

The trial of Mr. Aleynikov focused on the complex computer programs used by investment banks, hedge funds and other securities firms to squeeze more profits from their trading operations. Such high-frequency trading involves rapid-fire buy and sell orders aimed at capitalizing on minuscule differences in price.

In its second day of deliberations, the jury found Mr. Aleynikov guilty of theft of trade secrets and transportation of stolen property. He faces as long as 10 years in prison on the trade secrets charge.

U.S. District Judge Denise Cote changed his bail conditions after the verdict, requiring Mr. Aleynikov to be subject to home confinement pending sentencing.

The judge also suggested that his name be added to a watch list to prevent him from leaving the country. Mr. Aleynikov is from Russia originally.

Kevin Marino, Mr. Aleynikov's lawyer, declined to comment after the verdict.

Goldman Sachs declined to comment on the verdict.

Goldman Sachs to raise over $2bn from ICBC share sale

Goldman Sachs is looking to raise more than $2 billion by selling its stake in Industrial and Commercial Bank of China (ICBC).

According to the Wall Street Journal, the sale would lead to the investment bank reducing its stake in the firm from 3.9 per cent to 3.1 per cent.

The price of the shares are expected to range from HK$5.70 to HK$5.79 ($0. 73 to $0.75) while 2.75 billion shares will be available as part of the sale.

An unknown source close to the matter told the news provider that Goldman Sachs was undertaking the sale to reduce the bank’s exposure to risk.

The bank initially agreed to keep 80 per cent of its initial share in the bank back from any sale before April of this year.

Meanwhile, news reports have claimed that a team of proprietary traders at Goldman Sachs are currently in discussion with executives from Avenue Capital over potentially joining the firm.

Marc Lasry, manager of the hedge fund, is thought to be looking to take on staff from a team of traders headed up by Bob Howard.

Goldman to shutter principal strategies unit

Goldman Sachs (GS) has decided to shutter its principal strategies unit, which does its proprietary trading, in the wake of financial-overhaul regulation passed by Congress, according to a person familiar with the matter. The widely expected decision follows J.P. Morgan Chase's (JPM) decision to close its proprietary trading business.

Goldman Had 10 Days of Trading Losses in Q2

* Losses were more than $100 mln on three days

* Posted gains of more than $100 mln on 17 days

* Far from the perfection of the first quarter

(Reuters) - Sluggish markets and the May 6 "flash crash" pinched even highflier Goldman Sachs Group Inc in the second quarter, according to the company's quarterly report filed Monday.

The New York-based investment bank reported 10 days of trading losses in the period, including losses of more than $100 million on three days.

In the first quarter, Goldman hit trading perfection by reporting trading gains of at least $25 million every day.

Goldman's trading gains and losses have mirrored those of its Wall Street counterparts: Surging first-quarter trading results cooled in the spring and early summer.

The S&P 500 Index fell 12 percent in second quarter as the flash crash, the debate in Congress over financial reform, and renewed investor fears about U.S. economic growth resulted in low returns and high volatility.

Analysts and investors said Goldman's second-quarter results were not surprising, given the quarter's trading headwinds.

"It speaks to the difficulty of the markets we're in right now," said Walter Todd, co-chief investment officer at Greenwood Capital & Associates. "It's a very tough market for anyone to figure out and try to make any money."

While the second quarter was still largely profitable for Goldman's trading operations, positive trading days seesawed between booming returns and sluggish results.

The bank reported 17 days with more than $100 million in trading gains, and 12 days with gains of nil to $25 million.

Other Wall Street banks' second-quarter results have largely followed the same trend.

Morgan Stanley reported 11 days of trading losses. Bank of America Corp reported only one day with trading losses above $100 million.

Goldman's second-quarter results come as the bank is working to comply with financial reform legislation that restricts so-called proprietary trading -- making market bets backed by its own capital.

The restrictions of the so-called Volcker Rule also curb banks' investments in private equity and hedge funds at 3 percent of a bank's total capital.

Fabrice Tourre denies fraud allegations

Goldman Sachs executive Fabrice Tourre has denied acting improperly in regard to the controversial Abacus collateralized debt obligation (CDO) product.

Fabrice Tourre

Last week, the bank agreed to pay out $550 million after the Securities and Exchange Commission (SEC) accused it of misleading investors by not informing them that hedge fund Paulson & Co - which helped create the CDO - was betting on its failure.

The SEC said it would continue its case against Mr Tourre, who is said to have helped design the product.

But lawyers acting on his behalf have asked for the civil fraud charges against him to be dropped, reports Reuters.

"The purported claims against Mr Tourre are based solely on alleged actions and omissions concerning information known to many different Goldman Sachs employees working in various aspects of its business," his legal team said.

Goldman Sachs has not admitted or denied the SEC's claims, but did state that it regrets that marketing materials for the CDO did not disclose Paulson's involvement.

Goldman Sachs reports lower second-quarter earnings

Goldman Sachs shares tumbled in pre-market trading after the company reported earnings that beat Wall Street views, but revenue came in shy of what analysts had been expecting.

The financial giant said its net income was 78 cents a share in its second quarter, compared with $4.93 a share this time last year.

Excluding one-time items, Goldman earned $2.75 a share, topping analysts' estimates.

Sales for the most recent quarter reached $8.84 billion, down from $13.76 billion in the same period last year.

Analysts who follow the company projected Goldman Sachs to earn $2.08 a share on revenue of $8.94 billion.

Last week Goldman resolved a major headache by paying $550 million to settle the SEC case. The fraud charges stemmed from Goldman's marketing and packaging of the Abacus collateralized debt obligation.

Weakness in its trading and investment banking divisions also weighed on earnings.

Goldman said earnings were also impacted by a $600 million expense related to the UK tax.

"It's a pretty significant slowdown in their overall business: Investment banking revenue was down 36 percent year over year, and fixed income, currency, and commodity trading was down 35 percent," said Walter Todd, portfolio manager at Greenwood Capital Associates.

Goldman Settles With SEC

"Today's settlement sends positive message of deterrence and accountability," said the SEC's director of enforcement, Robert Khuzami.

Goldman Sachs agreed to pay $550 million to settle civil charges that it duped clients by selling mortgage securities that were secretly designed by a hedge-fund firm to cash in on the housing market's collapse.

Goldman agreed to pay $550 million to resolve allegations that the company misled investors who bought subprime mortgage-related securities created by Goldman. Although Goldman neither admitted nor denied wrongdoing, it made a rare concession that its marketing materials for the securities had been "incomplete," which it acknowledged was a "mistake."

"It is a major victory for the SEC because you don't find other settlements in which the defendant admits it made materially misleading disclosure," said John Coffee, a Columbia University securities-law professor. "This is one where they really bet the farm on this case by taking on the most esteemed firm on Wall Street, and they obtained a concession by Goldman that they misled their clients."

Still, the penalty equals 4% of Goldman's $13.4-billion profit last year. Moreover, investors concluded the settlement was worth much more to Goldman than it would pay.

Greek PM does not rule out legal action against US banks

(AFP) – ATHENS — Greek Prime Minister George Papandreou raised the possibility of taking legal action against US banks which he said in an interview on Sunday bore "great responsibility" for Greece's debt crisis.

Asked in an interview with CNN whether Greece was the victim of investment banks, he said: "I think, yes the financial sector, I hear the words fraud, lack of transparency, so yes there is great responsibility here."

When the interviewer followed up by asking whether legal action were a possibility, he responded "I wouldn't rule out that this may be a recourse," according to extracts of the interview aired on Greek public television.

The Greek parliament is currently looking into deals Greek authorities carried out in 2000 with help from Goldman Sachs that allowed them to mask the extent of Greece's debts through the use of complex financial instruments.

"Right now there is a parliament investigation in Greece, we are looking into the past how things went in the wrong direction and what kind of practices were negative practices," Papandreou said.

German Chancellor Angela Merkel has led criticism in Europe against banks' role in the debt crisis, slamming "treacherous" practices during the Greek drama and urging governments to crack down on speculators hunting profits in the turmoil.

Greece is paying a painful price for its past overspending with the government forced to slash civil servants' and pensioners' pay while raising taxes as a condition for a 110 billion euro EU-IMF bailout.

However, a poll published Sunday in the Ethnos newspaper found that 58.8 percent of the 1,028 people surveyed expected the country to steer clear of bankruptcy while 36.6 percent considered default inevitable.

While 56.2 percent of those polled by the Marc SA institute considered the austerity measures to be "necessary", 87.8 percent judged them to be "unfair".

Goldman Sachs rating downgraded to negative

Investment bank Goldman Sachs’ has had its rating downgraded from stable to negative by Fitch Ratings.

Recent legal issues faced by the financial services provider and changes to the regulatory landscape are the main reasons for the move, the agency explained.

Goldman Sachs’ A+ and F+ long-term default ratings were reaffirmed due to its strong liquidity, balance sheet and global presence within capital markets.

However, Fitch stated that the recent filing by the Securities and Exchange Commission, which accused the bank of deliberately misleading investors over an investment product related to subprime mortgages, had threatened the institution’s standing.

In a statement, quoted by Business Week, Fitch said: “The rating outlook revision to negative incorporates recent legal developments and ongoing regulatory challenges that could adversely impact Goldman’s reputation and revenue generating capacity.”

“For financial services companies, particularly those dependent on the capital markets, reputation is critically important.”

The organisation also listed changes to regulations which could threaten the bank’s rating.

Increased capital requirements, restrictions on proprietary trading and the centralised clearing of derivatives were all cited as potential future problems for Goldman Sachs.

Warren Buffett voices support for Goldman Sachs

Warren Buffett, a billionaire investor, has voiced his support for investment bank Goldman Sachs in the wake of the recent fraud allegations levelled by the Securities and Exchange Commission (SEC).

The regulator filed a charge of fraud against the financial institution and vice-president Fabrice Tourre, which accused the bank and its employee of deliberately omitting information from investment products linked to subprime mortgages.

Mr Buffet, chief executive of Berkshire Hathaway, said that he did not “hold it against Goldman Sachs that they are subject of [SEC] allegations”.

He was quoted by the Financial Times as saying: “There is no question that the allegation alone causes the company to lose reputation … the last few weeks hurt the company and morale ... it is not remotely mortal but it hurts.”

However, Mr Buffet added that after having studied details of the supposedly illegal transaction, he did not believe that Goldman Sachs had committed fraud.

Berkshire Hathaway is thought to own $5 billion worth of shares in Goldman Sachs.

Meanwhile, Goldman Sachs has revealed that its shareholders have filed a number of law suits against the financial institution accusing it of mismanagement.

Buffett Delivers Goldman Defense

Warren Buffett came to the defense of Goldman Sachs in hard-hitting comments at the Berkshire Hathaway shareholders meeting. Separately, the company recorded a first-quarter profit of $3.6 billion.

U.S. Said to Open Criminal Inquiry Into Goldman

Federal prosecutors have opened an investigation into trading at Goldman Sachs, raising the possibility of criminal charges against the Wall Street giant, according to people familiar with the matter.

While the investigation is still in a preliminary stage, the move could escalate the legal troubles swirling around Goldman.

The Securities and Exchange Commission, which two weeks ago filed a civil fraud suit against Goldman, referred its investigation to prosecutors for the Southern District of New York, which has now opened its own inquiry.

Goldman has vigorously denied the accusations by the S.E.C., which accused Goldman of defrauding investors involved a complex mortgage deal known as Abacus 2007-AC1.

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Synopsis: Federal prosecutors are now investigating the Goldman case to see if there are grounds for criminal charges. Stakes would be high for both Goldman and the US Attorney’s Office investigating the case if criminal charges were indeed filed. While Goldman cannot risk more damage to its company’s reputation, the attorney’s office would be haunted by the reminder of the failed prosecution of two former Bear Stern’s traders last fall.

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Fabrice Tourre “categorically” denies misleading Goldman Sachs investors

Fabrice Tourre, the banker at Goldman Sachs at the centre of an investigation by the Securities and Exchange Commission (SEC), has denied allegations of misleading clients.

Fabrice Tourre

The financial regulator charged the investment bank and its employee with fraud by failing to provide enough data to clients on a collateralized debt obligation (CDO) security.

Hedge fund manager Paulson & Co took a short position against the CDO, a move which the bank is alleged to have failed to divulge.

Mr Tourre, a vice-president at the bank, said before the committee: “I deny - categorically - the SEC’s allegation. And I will defend myself in court against this false claim.”

He explained that he remembered informing ACA, one of the supposed duped investors, that Paulson was anticipating acquiring credit protection on parts of the transaction, which “necessarily meant that Paulson was expected to take some short exposure in the deal”.

“The last week has been challenging for me and my family, as I have been the target of unfounded attacks on my character and motives,” the banker added.

According to the SEC, Goldman Sachs received an estimated $15 billion for structuring the investment.