Goldman Sachs (NYSE: GS) has been embroiled in controversy since the height of the financial crisis nearly two years ago. Today, we learned the firm may face yet another serious challenge, as a federal investigation is underway into insider trading at the historic Wall Street firm.
Share of Goldman Sachs Group Inc.’s stock fell more than 4 percent during Monday trading after these reports surfaced, and investors are once again looking around aimlessly for answers. The Wall Street Journal reported this past weekend that authorities are examining whether insider-trading rings reaped illegal profits totaling tens of millions of dollars. The report indicated that one
angle of inquiry is whether Goldman Sachs bankers leaked information about transactions to the benefit of certain investors.
During Monday’s trading day on the New York Stock Exchange, bank stocks led the decline in the broader market. Coinciding with the latest issue with Goldman are concerns that a bailout of Ireland’s troubled banks might be inadequate to contain Europe’s financial crisis. Goldman Sachs shares fell more sharply than
those of other large U.S. banks, which also fell, even though they were not specifically mentioned in the Journal’s story. The impact of the Irish bank collapse is yet to be fully realized as details of the EU’s actions have not been entirely disclosed as of yet. Initial expectations are that Ireland will receive similar actions and support to what was offered to Greece this past summer, in an effort to stabilize the market. Once the dust clears, we may see that we are in for another tumultuous quarter.
