Yesterday Goldman Sachs reported a 82% decline in profits due in part to a sharp decline in revenue and a bad bet on volatility of the securities markets as well as the $550 million dollar settlement reached last week with the Securities and Exchange Commission over allegations of securities fraud.
The earnings report came as a bit of a surprise to Wall Street observers who saw the Wall Sreet giant post its worst results since the fourth quarter of 2008. The equity trading desk saw a 62% decline in revenues and the fixed-income/currency and commodities-related trading did not fair much better reporting a revenue decline of 35%.
Overall, confidence in one of Wall Street’s most stable firms appears to be eroding as is the stock price. The SEC settlement, which was inked yesterday, cast a dark shadow over the firm that had managed to steer clear of the type of scandal that rocked many of the Streets most prestigious firm, bringing down several, including Bear Stearns (now JP Morgan Chase)and Lehman Brothers Holdings, forcing others to merge such as Merrill Lynch and Wachovia Securities (now Wells Fargo Securities).
Investors are still picking up the pieces from the broken portfolios due to the dramatic declines and failures in the financial service sector. If you have lost money investing in financial services related securities, please contact our office to discuss your options for recovery. Thank you.