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the under-fire Wall Street bank Goldman Sachs faced a fresh barrage of public and political outcry today as it revealed a 90% leap in profits in spite of accusations of dishonesty in its dealing with clients, raising the spectre of multimillion dollar bonuses at the height of a battle in Washington over regulatory reform.
Just days after US regulators began a $1bn (£650m) fraud action against the firm, Goldman revealed a leap in quarterly profits from $1.8bn to $3.5bn and disclosed that it was setting aside $5.49bn to pay its employees. A top lawyer at the bank rebutted the Securities and Exchange Commission's prosecution, insisting Goldman had not misled its clients and describing the case as a "he says, she says" dispute.
Goldman's figures were given short shrift by the White House, which is preparing for a fresh push on Wall Street on Thursday when Barack Obama will visit New York to deliver a speech pressing the case for a crackdown on the financial industry.
A senior economic adviser to the White House, Austan Goolsbee, suggested banks such as Goldman should admit that their soaring profits had been aided by the US government "stepping up and preventing them all from falling off a cliff".
Goolsbee said: "Before they all pat themselves on the back for the great job they did and get a big bonus based on their profits, somebody ought to recognise that a great deal of their profit came from financial interventions from the government to save their bacon."