The Securities and Exchange Commission is suing Goldman Sachs for securities fraud, reports the USA Today.
The SEC alleges that Goldman Sachs allowed clients to make investments without disclosing that the investment was created to fail, reports The New York Times.
The investments packaged by Goldman Sachs were created by a hedge fund creator who anticipated the burst of the real estate bubble, reports The New York Times.
The hedge fund against these investments made about $1 billion, reports USA Today.
Since the announcement of the lawsuit on Friday, Goldman Sachs stock has dropped along with other companies who are now believed to have participated in the same practices, reports The New York Times.