Goldman Earns $3.3B In 1Q As Fraud Case Looms

Goldman Sachs Group Inc. said Tuesday its first-quarter earnings almost doubled to $3.3 billion as its trading business again surpassed the rest of the financial industry. It was a bit of good news for the bank as it faces a government civil fraud charge.

Goldman Sachs earned $5.59 a share on revenue of $12.78 billion as bond, commodities and currency trading buoyed its profits for yet another quarter. That was well above expectations of analysts surveyed by Thomson Reuters. In the fourth quarter, Goldman Sachs earned a record $4.79 billion.

Goldman Sachs also reported sharply higher fees from underwriting stock and debt offerings.

Even as it reported another strong quarter, the bank is facing a major challenges after being charged Friday in a civil fraud lawsuit by the Securities and Exchange and Commission. The SEC alleges that Goldman Sachs and one of its vice presidents misled investors who bought complex financial products that were expected to fail.

CEO Lloyd Blankfein in a statement thanked the bank's supporters without specifically mentioning the SEC case.

"In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people," he said.

More on Goldman Sachs and Financial Reform:

Spitzer: SEC will Likely win Case against Goldman Sachs
GOP Decries "Partisan" Financial Reform Bill
Analysts Bullish on Goldman, Despite Charges
SEC vs. Goldman: A Matter of "Material"

The company said it set aside $5.5 billion in the first three months of the year to pay employee salaries and bonuses, up 17 percent from last year. However, Goldman Sachs said the percentage of revenue set aside for compensation in the quarter fell from 50 percent to 43 percent year-over-year.

Banks' high levels of compensation, including bonuses, have come under heavy criticism since the financial crisis that began in 2008. Lawmakers and the public have complained that the banks were rewarding the same employees whose risky trading practices helped plunge the country into recession. Goldman Sachs, because of its great success in trading, has come under particular sharp criticism.

The bank's stock rose almost 1 percent in pre-opening trading.

Goldman Sachs, which has outperformed other financial companies for years, has been the strongest bank throughout the financial crisis. It had less exposure to toxic mortgage-backed securities than other companies and also has been more aggressive in its trading.

Author Michael Lewis speaks to Katie Couric on Wall Street's out of control behavior:


Watch CBS News Videos Online

Goldman Sachs also said Tuesday that the executive at the center of the civil fraud case is voluntarily taking some time off from work.

Fabrice Tourre, who was named in the SEC lawsuit against the firm, is taking a break from his position at the firm's London offices, Goldman Sachs spokesman Michael Duvally said.

"It is voluntary. He decided to take some time off," Duvally said.

Tourre was a vice president in his late 20s when the alleged fraud was orchestrated in 2007. Tourre, the SEC said, boasted to a friend that he was able to put such deals together as the mortgage market was unraveling in early 2007.

Tourre, 31, has since been promoted to executive director of Goldman Sachs International in London.

[1renegade]

I hope they keep poking at Wall St. The more they keep inquiring or charging I make a boatload of money. So my Liberal and Democrat friends keep fighting the "good" fight and I will become very wealthy by 2012. Remember some of us choose not to participate in any recession or depression.

[honest_pols]

THESE FINANCIER-PARASITES WILLFULLY SCHEMED AND PLOTTED TO SWINDLE US

Time is long overdue, that our lawmakers put these selfish, greedy, scheming financier-parasites away behind bars, sentencing them to serve lenghty prison terms at hard labor, for the ruination of tens of millions to hundreds of millions of lives across America and across the globe.

These criminal financiers not only KNOWINGLY put together poor, worthless investment vehicles, but they also CALCULATED AND SCHEMED applying their sophisticated marketing of the same in cleverly disguised packages to further obfuscate ...

[honest_pols]

THESE FINANCIER-PARASITES WILLFULLY SCHEMED AND PLOTTED TO SWINDLE US

Time is long overdue, that our lawmakers put these selfish, greedy, scheming financier-parasites away behind bars, sentencing them to serve lenghty prison terms at hard labor, for the ruination of tens of millions to hundreds of millions of lives across America and across the globe.

These criminal financiers not only KNOWINGLY put together poor, worthless investment vehicles, but they also CALCULATED AND SCHEMED applying their sophisticated marketing of the same in cleverly disguised packages to further obfuscate ...

[wjksea]

Goldman extracted $ 3.3 billion dollars.

[AtLasOn1Kl733]

I wonder how much of that money will make it to the Cayman Islands?

[SocialEvo]

--- The constant slew of problems that have not been fixed by repeated attempts over the past 30+ years, the obvious misbehavior, blatant greed and selfishness of people in power, and the wanton lack of respect for humanity as a whole lends itself to just one conclusion: It's time to upgrade society, version 2.0.

--- The Youtube Channel TZMSocialEvolution has several videos on this. "Awakening" and "Our Technical Reality" are key starting points.

--- "We can't solve problems by using the same kind of thinking we used when we created them." -- Albert Einstein

[rexrox2]

I'm just wondering if Obama will return the almost 1 million dollars Gold.Sachs gave to his campaign. "OBAMA GETS TOUGH ON WALL ST." What an absolute joke. Hillary go almost a half million from G-Sachs. Looks like the MSM hasn't been covering the ties the Dems have with Wall St. Also, what about Fannie Mae and Freddie Mac, they got almost 1/2 TRILLION FROM US. Any changes to their operation, any outrage??? Let's go back to the 2005 Banking Committee, and the House Finance Committee's and the bills to toughen regs. on F and F. All the dems voted against it and ALL the repubs. voted for the tougher regulation. Can we ever get the real picture from the MSM???

[msimamaji]

Goldman Sachs record profits means more political campaign contributions to GOP candidates. Bear in mind that these allegations would never had seen the light of day, since the two Republicans on the SEC voted against any form of investigation. This proves that the entire GOP is an assortment of crooks. They will continually lie to the public about everything and anything. They are owned by wealthy corporations who defraud the public. The people need to wake up and support Obama's efforts to reform the banking system. They also need to vote out all the GOP Wall Street crooks in Novemember. That's the only way to get an honest government.

[Cattzen]

Penalties, Fines, and/or Restitutions for Goldman Sacs will amount to a diminutive hindrance seeing the profits they continue to earn. GS couldn?t have barrowed (paid penalties) the money any cheaper!

[SocialEvo]

LiftingSkirts - Prove your assertion, because I can prove mine.

Company A employs 50 people. A new piece of tech comes out that produces as much as 25 people at a much lower cost. To increase profitability, Company A buys the machine and let's 25 people go (no more health care issues, no more paid time off, less insurance risk, etc). Overall, it's a huge increase in profitability for company A while maintaining an equivalent production rate. Not so good for the people they released though, is it? But great for the Capitalist ideal of maximizing profits by all means necessary, which is exactly what is taught these days.

Now multiply this over all industries and over 30+ years of technological advancement and viola...case closed.

Now you site outsourcing as a problem, and I agree, but that is nothing more than accepted international slave labor. Most outsourced labor barely survives, their pay is ludicrously low, and they generally work/live in terrible conditions, but we allow it. Another wonderful byproduct, brought to you by Capitalism...profit over people.

All systems of OLD WORLD government are contingent on a productive workforce. Welcome to the 21st Century. There are better, more advanced ways of doing things where people don't have to work as they do today. They won't be lazy bums either, because they'll be truly free to pursue their passions without any negative repercussions.

Any reference to any old world system is irrelevant in today's world, because NONE of them were ever created or envisioned with the use of advanced technology to help reduce or eliminate human labor as a core support mechanism, nor do they account for the Earth's finite resources and a proper management technique to assure we don't consume ourselves into oblivion.

A new age requires new thinking.

The Youtube Channel TZMSocialEvolution has several videos on this. "Awakening" and "Our Technical Reality" are key starting points.

[patocc123]

Considering that I deal in the robotic industry your analogy isn't exactly true.

The machine that replaced the people requires skilled personnel to service and maintain the equipment. Plus they need skilled personnel to operate. So yes 1 machine can do the work up 25 people but it also requires 5 skilled/educated workers to control/maintain it.

Your ideaology is a major misconception that I have to deal with when dealing with companies that want to go robotic. Thier cheap labor is normally replaced by skilled labor. Costs of labor is normally zero-sum but the savings is in the health/401k programs.