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SEC Fraud Suit May Tarnish Goldman's Rep

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Stock prices whiz by on a ticker near the Goldman Sachs booth on the floor of the New York Stock Exchange April 16, 2010 in New York, New York.

Goldman Sachs' civil fraud suit could mean plenty of trouble down the road for the big bank.

The Securities and Exchange Commission filed a suit against Goldman on Friday, saying that it sold risky mortgage investments without disclosing that the securities were crafted in part by a hedge fund manager who was betting they would fail, according to The Associated Press. Goldman has denied the SEC's allegations.

The AP reports that Goldman stands to lose $700 million in the case. If Goldman does win, analysts say the big Wall Street bank still may not be able to shake the charges in an industry based largely on trust.

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