Securities Fraud | featured news

American International Group Inc. agreed to pay $725 million to settle a long-running securities lawsuit alleging that the company several years ago engaged in insurance bid-rigging and inflated its stock price and insurance reserves.

A Senate investigation into the financial crisis has found that Goldman Sachs, the storied Wall Street investment bank, sought to profit from the historic decline in housing prices by betting against the US mortgage market.

Goldman Sachs said Tuesday its first-quarter earnings almost doubled to $3.3 billion as its trading business again surpassed the rest of the financial industry. A top lawyer for the bank, which is facing civil fraud charges, said Goldman would "never intentionally mislead anyone."

Representative Barney Frank said on Monday that securities regulators' fraud case against Goldman Sachs increases the chance that financial reform will pass.

In a civil suit filed Friday, the S.E.C. accused the investment bank of securities fraud over a deal in which Goldman profited from bets against products it sold to customers.

The attorney general accused the bank and two executives of securities fraud. Meanwhile, the bank settled an S.E.C. claim for $150 million.

Attorney General Jerry Brown says customers were misled into believing that auction-rate securities were safe. Wells Fargo disputes that, and says it aided customers hit by the collapse of the market.

California today sued investment subsidiaries of Wells Fargo & Co.

Barrett Wissman is the first investment executive to be implicated in an investigation of corruption at the New York state pension fund.