Goldman Sachs is to be investigated by the Financial Services Authority following accusations of fraud by the US Securities and Exchange Commission.
The US financial watchdog has filed a civil suit against Goldman Sachs for structuring a sub-prime residential mortgage-backed secu-rity with hedge fund Paulson & Co, with the fund shorting the securities involved in the deal.
The SEC has alleged that Gold-man Sachs failed to tell investors that the transaction had been set up in this way. Goldman vice-president Fabrice Tourre was put on leave after the charges were filed. He has also been de-registered by the FSA and banned from holding a position in any regulated company.