Goldman Sachs: UK's Brown calls for "special investigation" over moral bankruptcy

Discussion in 'Wall St. News' started by ASusilovic, Apr 18, 2010.

  1. Gordon Brown has called for a "special investigation" into Goldman Sachs after reports that the bank is to pay £3.5bn in bonuses.

    Speaking on the BBC's Andrew Marr Show the Prime Minister described the situation as one of "moral bankruptcy".

    His criticism follows allegations by the Securities and Exchange Commission in US that Goldman defrauded investors during the sub-prime housing crisis.

    Goldman strongly rejected the claims as wrong "in fact and law".

    Mr Brown said that the UK Financial Services Authority should launch an immediate inquiry in co-operation with the US regulator, the Securities and Exchange Commission (SEC).

    The Sunday Times reported that the bank was set to pay out £3.5bn in bonuses to its staff worldwide - including almost £600m to 5,500 London-based employees - for just three months work.

    On Friday, the SEC issued civil charges against Goldman that it failed to disclose conflicts of interest during the marketing of sub-prime mortgages in which investors lost $1bn.

    Mr Brown said that the issue underlined the need for further reform of the international banking system. "I am shocked at this moral bankruptcy. This is probably one of the worst cases that we have seen," he said.