Reports Friday that Goldman Sachs (NYSE: GS) expects to get subpoenas related to its mortgage businesses are a reminder that underperforming financial exchange traded funds continue to face regulatory uncertainty.
Goldman Sachs is feeling heat for its conduct during the financial crisis following a scalding Senate panel report. A recent Matt Taibbi article in Rolling Stone lambasting Goldman has also stirred the pot.
“It now appears that the pressure on the Justice Department to bring a criminal lawsuit against Goldman is building to a high pitch,” Rochdale Securities said in a recent note on Goldman. [Goldman Sachs Downgrades Claw Financial ETFs]
Earlier this week, reports swirled that New York Attorney General Eric Schneiderman was probing mortgage securities packaged by big banks such as Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS) and Goldman. [Bank ETFs Shake Off Report of Mortgage-Securities Probe]
Financial ETFs have trailed the market badly in 2011 and Goldman shares recently registered a negative technical signal. [Financial ETFs Dive as Goldman, Bank of America See ‘Death Cross’]
Financial Select Sector SPDR Fund (NYSEArca: XLF)
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