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Goldman Sachs Lost Money on 10 Days in Second Quarter
Goldman Sachs Group Inc., the bank that makes the most revenue trading stocks and bonds, lost money in that business on 10 days in the second quarter, ending a three-month streak of loss-free days at the start of the year.
Losses on Goldman Sachs’s trading desks exceeded $100 million on three days during the period that ended on June 30, according to a filingtoday by the New York-based company with the U.S. Securities and Exchange Commission. The firm also disclosed that trading losses surpassed its value-at-risk estimate, a measure of potential losses, on two days.
Trading results across Wall Street firms declined after Goldman Sachs and its biggest rivals posted perfect results, with no losing days, in the first quarter. Goldman Sachs’s $5.61 billion in second-quarter trading revenue exceeded all of its Wall Street competitors. The bank, overseen by Chairman and Chief Executive Officer Lloyd Blankfein, relied on trading for 71 percent of its revenue in the first half of the year, down from 80 percent a year earlier.
Today’s filing also shows that the firm’s traders generated more than $100 million on 17 days during the quarter. Of the 65 days in the quarter, Goldman Sachs traders made money on 55 days, or 85 percent of the time.
Morgan Stanley said separately today it lost money on 11 days during the second quarter. The losses never exceeded $75 million daily, and never surpassed the firm’s value-at-risk estimate. Morgan Stanley’s traders made more than $175 million on one day, the firm said in an SEC filing today.
Goldman Sachs agreed last month to pay $550 million to settle a fraud lawsuit filed by the SEC over Goldman Sachs’s 2007 sale of a mortgage-linked investment. In the settlement, a record for the SEC and a Wall Street firm, Goldman Sachs said it made a “mistake” by failing to disclose that a hedge fund that helped construct the investment was also planning to bet against it.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net
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