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Goldman Sachs has first quarter with no trading losses

May 11, 2010|Bloomberg News

Goldman Sachs Group Inc.'s traders made money every day of the first quarter, a feat the firm has never accomplished before.

Daily trading net revenue was $25 million or higher in all of the first quarter's 63 trading days, New York-based Goldman Sachs reported in a filing with the Securities and Exchange Commission on Monday. The firm reaped more than $100 million on 35 of the days, or more than half the time.

Goldman Sachs, which is facing a fraud lawsuit from the SEC related to the sale of a mortgage-linked security in 2007, generated $9.74 billion in trading revenue in the first quarter, exceeding all of its Wall Street competitors. Trading accounted for 76% of first-quarter revenue.

The lack of trading losses could add to the perception that Goldman Sachs has an unfair advantage in the markets, one shareholder said.

"It will reinforce the heads we win, tails you lose mentality that people think actually exists and promotes the concept of an unfair advantage," said Douglas Ciocca, a managing director at Renaissance Financial Corp. in Leawood, Kan. "It's too politically charged not to. How is that possible that they only make money?"

The bank, which reported record earnings last year, is contesting the SEC's lawsuit. The firm's executives were interrogated at a Senate subcommittee hearing last month. Goldman Sachs, which maintains that it did nothing wrong, is also being investigated by federal prosecutors, people familiar with the matter said.

"This is the first time we have reported zero trading loss days in a quarter," said Samuel Robinson, a Goldman Sachs spokesman. "We believe it shows the strength of our customer franchise and risk management."

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