Tags: US | Goldman | Sachs | Ratings

Fitch: Legal Issues Threaten Goldman's Top Rating

Wednesday, 05 May 2010 12:39 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Fitch Ratings said Wednesday that Goldman Sachs' recent legal troubles and the evolving regulatory landscape might lead the agency to eventually review the bank's top-tier credit rating.

Fitch Ratings, a major credit ratings agency, said in a release that it left Goldman Sachs Group Inc.'s rating of "A plus" alone for now given its strong performance. Fitch noted that Goldman "consistently" outperforms its global banking peers.

However, Fitch said it lowered its long-term view of Goldman's debt ratings because of the legal issues Goldman is facing, which could hurt its reputation and ability to generate revenue.

"Goldman's franchise and market position are potentially vulnerable to scrutiny by stakeholders" and, like its peers, "may be affected by the industry's regulatory evolution," Fitch said in a statement.

A spokesman for Goldman declined to comment. Investors seemed to show little concern about Fitch's view. Goldman shares rose $1.25 to $150.70 in afternoon trading.

Congress is currently debating a potential overhaul of financial regulations that could include restricting trading by big Wall Street banks. Goldman Sachs was one of the most profitable banks throughout the credit crisis and during the ongoing recovery. It has used what some consider aggressive trading strategies to increase earnings.

Such strategies have resulted in scrutiny by the Securities and Exchange Commission. The SEC accused Goldman of fraud in its dealings of mortgage securities that it created before the credit crisis erupted. Many blame risky securities like those tied to subprime mortgage securities for worsening the financial crisis.

The Justice Department has opened a criminal investigation in Goldman's packaging of the securities.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Krauthammer: GOP Must Push Its Agenda After Taking Senate

Tuesday, 21 Oct 2014 22:07 PM

Republicans have 3-1 odds of taking over the Senate, and they need to use that power to push their agenda, conservative  . . .

Wyoming Gay Couples Get Marriage Licenses

Tuesday, 21 Oct 2014 22:03 PM

Wyoming has become the latest state to allow same-sex unions, bringing the wave of legalizations to a place where the 19 . . .

Alveda King: Obama Proves Skin-Color Voting Doesn't Help Blacks

Tuesday, 21 Oct 2014 21:13 PM

Alveda King, niece of the Rev. Martin Luther King Jr., is at sharp odds with the Rev. Al Sharpton about which political  . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved