Feds Probe Goldman's Pay Practices

By Rob Quinn, Newser Staff

Posted Aug 6, 2009 8:00 AM CDT

(Newser) – Federal agencies are taking a close look at Goldman Sachs' pay practices and use of credit instruments as the firm's profits rebound to record-breaking levels, the Los Angeles Times reports. The company, which says it is complying with the dual investigations, has paid back its $10 billion TARP loan, but critics fear it is returning to the same risk-taking ways that helped ignite the economic meltdown.

Goldman has already put away $11.4 billion toward bonuses this year, an amount that raises suspicion coming so soon after the bailout, one corporate governance professional says. "You can't say, 'We're off the dole now. We deserve as much money as we can generate through our bonus pool,' " he argues. Goldman's chief executive has reportedly told employees not to flaunt their wealth for fear of inviting further public anger.

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Financial professionals laugh in the Goldman Sachs booth on the floor of the New York Stock Exchange during afternoon trading . (Getty Images)

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They've become a lightning rod for all that is wrong with Wall Street compensation even though they're extremely successful and profitable. - Jim Reda, founder of a New York compensation consulting firm

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