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Goldman news hits other financial stocks Add to ...

Although Goldman Sachs Group Inc. is the first financial firm in the sights of the Securities & Exchange Commission, it might not be the last.

Barron's Stocks To Watch Today noted that the commission declined to say if other banks could be targeted with similar charges - which essentially stem from Goldman's decision, before the start of the financial crisis, to market subprime-related securities without disclosing a bet against those same securities by a hedge fund, which helped create them in the first place.

Goldman shares fell $25.54 (U.S.), or 13.9 per cent, to $158.73 soon after the charges were announced by the SEC on Friday morning. Other financial stocks also fell steeply.

Deutsche Bank AG shares, trading as American Depositary Receipts in New York, fell 7.1 per cent. Bank of America Corp., so soon after reporting first quarter earnings that beat analysts' expectations, fell 5.5 per cent. Citigroup Inc. fell 6 per cent and JPMorgan Chase & Co.

Canadian bank stocks haven't been caught in the selloff, although they were generally weaker at the start of the trading day. Royal Bank of Canada fell 0.4 per cent and Toronto-Dominion Bank fell 0.5 per cent.

Meanwhile, the SEC's charge against Goldman Sachs isn't the only event unsettling investors on Friday. The commission also announced that it is investigating comments made General Electric Co.'s chief executive at the peak of the financial crisis, telling the Treasury Secretary that it was struggling to sell debt but tell investors that the company's debt programs were fine.

According to Bloomberg News: "The U.S. Securities and Exchange Commission is reviewing General Electric Co.'s 2008 disclosures after ex-Treasury Secretary Henry Paulson said the firm told him at the peak of the financial crisis it struggled to sell debt.

"'The SEC has requested information about our September 2008 statements,'" GE spokeswoman Anne Eisele said [Thursday] responding in an e-mail to questions from Bloomberg News. 'We are fully cooperating with them and are entirely confident our disclosures were accurate.'"

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