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Goldman Sachs hits back

Washington - A Goldman Sachs trading executive on Tuesday challenged the US government's fraud allegations against the company and himself, asserting to lawmakers, "I did not mislead".

Fabrice Tourre said in prepared testimony that he does not recall telling investors that a Goldman hedge fund client had bought into an investment that soured. Instead, the hedge fund, Paulson & Co., bet against the security - and profited handsomely.

He was one of several Goldman officials to appear before the US Senate Permanent Subcommittee on Investigations in its probe into the Securities and Exchange Commission (SEC) civil fraud case against the giant investment house.

The hearing comes as the Senate grapples with Democratic-sponsored legislation to overhaul the U.S. financial regulation system. Republicans on Monday blocked the Senate from taking up the measures, but Democrats are vowing to try again.

Tourre disputed the government's allegation that the Goldman security at the heart of the inquiry was secretly designed to fail.

In his prepared testimony, he said, "I deny - categorically - the SEC's allegation. And I will defend myself in court".

Ten days after the SEC action, the Senate panel is looking into allegations that Goldman used a strategy that allowed it to profit from the housing meltdown and reap billions at the expense of clients.

- Sapa-AP

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