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Goldman Sachs to Review Firm's Core Principals

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Ayesha Tanzeem

There were tough questions and protesters outside Goldman Sachs' annual shareholder meeting, this week.  But as the chief executive of the giant Wall Street firm promised it would review its own business practices, investors reelected the company's board of directors.

Goldman faces government allegations of civil fraud and reports of a criminal investigation linked to the troubled subprime mortgage markets.

Some shareholders and others expressed their displeasure with an iconic American company that, to some, has become a symbol of excess.

There were tough questions from some shareholders of one of America's oldest and biggest investment banks.  Inside, one investor repeatedly called on the chief executive officer and chairman to resign.

Several protestors gathered outside the meeting in the financial district of New York, calling for more disclosure of cooperate spending on U.S. political campaigns. The scene outside the meeting comes three weeks after the firm was charged with civil fraud over subprime mortgages it sold to investors.  The U.S. Securities and Exchange Commission says Goldman lied about its risky securities just as the housing market was beginning to falter.

Company executives have since faced angry lawmakers, U.S. senators who accused them of "unbridled greed."  Chairman and CEO Lloyd Blankfein and others strongly denied wrongdoing but there are reports in the U.S. media of a criminal probe.

Annemarie McAvoy, a former federal prosecutor and has worked on Wall Street, said, "I certainly wouldn't be happy with the mess they are in right now. As far as the SEC, the criminal investigation, the Senate hearings, they have got so much going on right now. And that makes it very difficult."

Shareholders have suffered losses of more than 20 percent since the SEC filed charges.  The chairman, Blankfein, promised his investors that the company would review the practices that made it subject to legal trouble and public censure.

Katrina Vanden Heuvel is editor and publisher of the Nation Magazine. "If it was a meeting about anything, it was how they were going to be more introspective and reflective about their behavior and they've set up a committee on standards to look into moving with more integrity," she said.

Some economists said the global financial crisis was fueled by a lack of oversight of the subprime mortgage industry and its complicated investment products.

And some of Goldman's own traders boasted in e-mails that the company made more than it lost by making so-called short trades -- bets that its own risky mortgage products would lose money.

Despite the recent stock losses, some of Goldman's shareholders praised the embattled company's chief executive.

"I think he did what he was supposed to do. I think he was a market maker. Personnaly I'm an investor and I don't think he has done anything wrong. Of course, it's up for the courts to decide," said one shareholder.

All of Goldman's board members, including the chairman, were re-elected.

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