UK to investigate fraud claims at Goldman Sachs

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.