Goldman Sachs Earnings: Bank's Profit Skyrockets To $3.5 Billion Over First 3 Months Of Year

(Huffington Post 20 April 2010 Shahien Nasiripour)

Goldman Sachs, which is now accused by government regulators of defrauding investors, nearly doubled its income in the first quarter to nearly $3.5 billion, thanks to a $2 billion swing in the firm's principal investments. The firm, the most profitable firm in Wall Street history, blew past Wall Street estimates, which expected a 43 percent increase in income.

The firm's revenues soared to $12.8 billion in the three-month period ending in March, a 36 percent increase over the same period last year. Most of the increase was due to the firm's trading and principal investments unit, the part of the firm that trades and invests for clients, as well as for itself with its own cash. The numbers follow last week's news that the U.S. Securities and Exchange Commission charged the firm and one of its top officers with civil fraud creating and selling exotic securities tied to subprime home mortgages. The charges stem from a 2007 deal in which the bank allegedly failed to disclose that securities in one of its Abacaus deals were handpicked by a hedge fund that was betting on them to fail.

Since then, members of Congress have called for further investigation. Governments across Europe have done the same, with the U.K. Financial Services Authority opening a probe into the firm. The $2 billion swing in the firm's principal investments -- essentially the firm's investments with its own cash -- from a $1.4 billion loss in the first quarter of last year to a $510 million profit in the quarter ending in March accounted for much of the rise in the firm's $3.4 billion rise in total revenue.

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