The Securities and Exchange Commission (SEC) sued Goldman Sachs on Friday for investor fraud.
Goldman allegedly created and sold derivatives tied to high-risk subprime mortgages, and then profited by betting against those loans, the New York Times reported.
The SEC estimates that Goldman Sachs made $15 million by defrauding investors, and they could have to pay up to three times that amount if they lose the lawsuit, according to a Time blogger.
In repose to the lawsuit, Democratic lawmakers are putting pressure on Republicans to support a recent Obama administration proposal to increase Wall Street oversight, the New York Times reported.
Goldman Sachs stock fell more than 12% after the SEC announcement, according to a Time.