The Securities and Exchange Commission last month accused investment bank and securities firm Goldman Sachs (NYSE:GS) of securities fraud because of an investment vehicle it created that allowed the firm and some of its clients to bet against and profit from the housing market crash. Goldman sold these same investments to its customers, who lost billions on them, and did not disclose that the person who had a hand in choosing the investments, hedge fund manager John A. Paulson, was also betting against them. While Goldman's guilt or innocence is not yet clear, these key numbers help tell at least part of the story.

In Pictures: Biggest Stock Scams

The Numbers
April 16, 2010:
The day when the SEC filed a civil lawsuit against Goldman for securities fraud because of an investment it created, the Abacus 2007-AC1, to bet on the housing market's failure. The Abacus was a synthetic collateralized debt obligation that consisted of credit default swaps. (Find out more in Credit Default Swaps: An Introduction.)

April 30, 2010: The day federal prosecutors formally began a criminal investigation of Goldman.

25: The number of investment vehicles Goldman created to bet against (short) the housing market.

$10.9 billion: The total value of the Abacus investments.

$15 million: The fees earned by Goldman on its Abacus 2007-AC1 investment.

$840.1 million: How much the Royal Bank of Scotland, the hardest hit in the Abacus investment, lost on the deal.

$1.2 billion: Goldman's losses from investments in the residential housing market during the two years of the financial crisis, according to Blankfein's prepared remarks in his testimony to the U.S. Senate on April 27, 2010.

$3.46 billion: Goldman's earnings in the first quarter of 2010.

$68.7 million: What Goldman Sachs paid CEO and chairman Lloyd Blankfein in 2007 after a year of record revenue and earnings. This was the highest pay a CEO had ever received.

$236: The record-high price per share of Goldman stock reached in late October 2007.

$53: The record-low price per share of Goldman stock reached in November 2008.

$10 billion: The amount of bailout money Goldman Sachs received in late 2008.

June 2009: The month in which the company had repaid its bailout money in full, with interest, to the government. According to Blankfein, the interest represented "a 23% annualized return for taxpayers."

$160.70: The closing price of Goldman's stock the day the lawsuit was announced. The stock opened that day at $183.62. Its 52-week high as of May 6, 2010, was $193.60; its low was $128.06.

$5 billion: Amount of preferred stock Warren Buffett's company, Berkshire Hathaway, owns in Goldman. Buffett, despite his criticism of Wall Street, has been outspoken in his continuing support of Goldman.

35,000: Number of people who work at Goldman Sachs.

4%: Percentage of Goldman shares owned by the company's employees.

What's the Verdict?
Is Goldman Sachs guilty, or is it being picked on to justify tighter regulation of the financial sector? Or both? It's important to keep in mind that just because the numbers are large and just because Goldman is a financial firm that has managed to remain profitable during a financial crisis does not mean that the company is inherently greedy or crooked or that it should be presumed guilty. A company founded in 1869 wouldn't have lasted this long if dishonesty and corruption was its M.O. (Learn more in The Goldman Sachs Fraud Explained.)

As recently as March, Fortune ranked Goldman No. 8 in its list of 50 most admired companies; in February, Barron's ranked it No. 30 on its list of the world's most respected companies. Multiple sources, including the Sunday Times, BusinessWeek, Working Mother and Vault, have rated it as one of the top companies to work for.

Bottom Line
It will likely be months or years before we have enough facts to know the truth of a story that's only just beginning to unfold. We'll have to continue to watch the numbers and see what they add up to for Goldman Sachs.

Feeling uninformed? Check out the financial news highlights in Water Cooler Finance: Greece Is Burning And Buffett's Under Fire.

Related Articles
  1. Insurance

    Cashing in Your Life Insurance Policy

    Tough times call for desperate measures, but is raiding your life insurance policy even worth considering?
  2. Stock Analysis

    What Exactly Does Warren Buffett Own?

    Learn about large changes to Berkshire Hathaway's portfolio. See why Warren Buffett has invested in a commodity company even though he does not usually do so.
  3. Fundamental Analysis

    Using Decision Trees In Finance

    A decision tree provides a comprehensive framework to review the alternative scenarios and consequences a decision may lead to.
  4. Investing Basics

    4 Iconic Financial Companies That No Longer Exist

    Learn how poor management, frauds, scandals or mergers wiped out some of the most recognizable brands in the finance industry in the United States.
  5. Bonds & Fixed Income

    Credit Default Swaps: An Introduction

    This derivative can help manage portfolio risk, but it isn't a simple vehicle.
  6. Options & Futures

    Understanding The Escrow Process

    Learn the 10 steps that lead up to closing the deal on your new home and taking possession.
  7. Active Trading

    What Is A Pyramid Scheme?

    The FTC announced it had opened an official investigation of Herbalife, which has been accused of running a pyramid scheme. But what exactly does that mean?
  8. Options & Futures

    Terrorism's Effects on Wall Street

    Terrorist activity tends to have a negative impact on the markets, but just how much? Find out how to take cover.
  9. Economics

    Currency Swap Basics

    A currency swap involves two parties exchanging a notional principal and interest to gain exposure to a desired currency.
  10. Mutual Funds & ETFs

    Scared By ETF Risks? Try Hegding With ETF Options

    With more ETFs to trade, the risks associated with these investments have grown. To mitigate these risks, ETF options are a hedging strategy for traders.
  1. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  2. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  3. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
  4. What are some high-profile examples of wash trading schemes?

    In 2012, the Royal Bank of Canada (RBC) was accused of a complex wash trading scheme to profit from a Canadian tax provision, ... Read Full Answer >>
  5. How can an investor profit from a fall in the utilities sector?

    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>
  6. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center