The federal government is accusing Goldman Sachs & Co. of lying to investors during the mortgage meltdown.
The Securities and Exchange Commission filed a civil complaint April 16, claiming the group failed to disclose conflicts of interest in mortgage investments -- including that one of its clients helped create and bid against subprime mortgage securities sold to other investors.
The SEC added that the fraud was headed by Fabrice Tourre, a young Goldman vice president who has since been promoted to executive director of Goldman Sachs International in London.
Tourre allegedly even boasted to a friend that he was able to put these deals together as the housing market began to decline in early 2007. Goldman Sachs called the claims "completely unfounded in law and fact."
The company's shares fell more than 12 percent, Friday, in light of the charges. The SEC is seeking fines and restitution from Goldman and the executive involved.
Meanwhile, Congress is coming up with ways to crack down on Wall Street practices that contributed to the financial crisis. Among the proposals are tougher rules for complex investments like those involved in the alleged Goldman fraud.