THE Financial Services Authority (FSA) launched a a formal enforcement investigation into Goldman Sachs – four days after US regulators filed a fraud case against Wall Street's biggest investment bank.
The UK regulator said in a statement: "Following preliminary investigations the Financial Services Authority (FSA) has decided to commence a formal enforcement investigation into Goldman Sachs International in relation to recent SEC allegations.
"The FSA will be liaising closely with the SEC in this review.”
The US Securities and Exchange Commission has accused Goldman of hiding from investors the fact that hedge fund Paulson & Co was betting against a subprime mortgage product that it helped create. Goldman has denied the charges.
The FSA's move draws it into what promises to be one of the biggest legal rows in recent banking history, and both the SEC and Goldman are expected to come out fighting.
City A.M. Reporter