Top Goldman Sachs executives are preparing to tell Congress that they were unsure whether US housing prices would rise or fall and did not take any action at odds with the interests of its clients, The Washington Post reported on Saturday.
In a move that shocked Wall Street, the US Securities and Exchange Commission (SEC) charged Goldman Sachs with fraud earlier this month, sending the company's share price into a tailspin.
The SEC accused Wall Street investment giant Goldman Sachs of "defrauding investors by mis-stating and omitting key facts" about a product based on subprime, or higher-risk mortgage-backed securities.
The company has vigorously denied any wrongdoing and sought to defend its reputation as Wall Street's most stable finance house.
Goldman chief executive Lloyd Blankfein is scheduled to testify before the Senate Permanent Subcommittee on Investigations next Tuesday.
In advance of this testimony, Goldman prepared the 11-page internal document that was obtained by The Post.
The paper attempts to deflect criticism that the bank invested its own money betting against the housing market while simultaneously urging clients to invest in securities that would increase in value only if the housing market did, the report said.
It describes debates among top executives in 2006 and 2007 over whether the firm should make investment decisions based on the belief that the mortgage market would continue to prosper, the paper noted.
The document also details meetings and e-mails that ultimately resulted in a decision to reduce the company's exposure to the mortgage market, especially subprime loans.
In addition, the paper repeats Goldman's frequent explanation that it was not investing its own money in financial transactions to make a trading profit but to help investors who wanted to do a deal and could not easily find someone else to trade with, The Post said.