Goldman Sachs May Face Huge Audit By Financial Crisis Inquiry Commission

The Financial Crisis Inquiry Commission, unhappy about the efforts by Goldman Sachs Group (GS) to give it comprehensive data on its derivatives trading group, may find the information out anyway through an audit. “We have a deep level of questioning about whether we’re getting the straight scoop here and whether Goldman is working with us on information that they surely have,” Phil Angelides, chairman of the US Congress-appointed commission told the FT.

It is the third piece of very bad news for Goldman in the last few days.Goldman posted disappointing earnings because its highly profitable investment banking and trading divisions slowed in the last quarter. The firm had to account for its settlement with the SEC, but that is a one-time charge. The faltering in the growth of its core businesses could continue and will likely be compounded by restrictions put on proprietary trading by the new financial reform legislation

Goldman also found out the inspector general of the SEC has questioned the timing of the firm’s settlement with the agency. It came just days before the passage of the Obama financial reform bill. The inspector general also appears to be investigating if details of the settlement were leaked to the press.

And, just a week ago, Goldman’s future seems to be so bright again.

Douglas A.  McIntyre