FSA to investigate Goldman Sachs

The Financial Services Authority has announced it is to start a formal enforcement investigation into Goldman Sachs International following fraud allegations from the US Securities and Exchange Commission.

It emerged last week that the US financial watchdog has filed a civil suit against Goldman Sachs for structuring a transaction with hedge fund Paulson & Co, with Paulson & Co shorting the securities involved in the deal.

The SEC has alleged that Goldman Sachs failed to tell investors that the transaction had been set up in this way.

‬‪The FSA says it will be liaising closely with the SEC in its own investigation.