Goldman Sachs to revamp operations after 4Q earnings

Goldman Sachs [stock GS][/stock] is making certain changes to its business segments, commencing with its earnings release for the fourth quarter of 2010. The revamp will be effective concurrent to the earnings report, being issued on Jan. 19, 2011, according to a filing Tuesday with the Securities and Exchange Commission. Essentially the investment bank will switch its operations from three distinct business segments to four. The largest change comes to the trading and principal investments division, which will be “desegregated” into two segments: institutional client services and investing & lending, according to the filing. Client services will be for marketing various products for and on behalf of clients, separating the firm’s investing and lending activities. Goldman is currently the focus of several lawsuits concerning its prior business operations. Notably, the bank is being sued for its marketing of the CDO platform known as ABACUS, which it also allegedly held investment positions. Goldman Sachs also settled civil charges arising out of this fraudulent conduct, agreeing to pay nearly $600 million in fines. Of that, $550 million is from the SEC, and the rest is split among the U.K.’s Financial services Authority ($27 million) and Financial Industry Regulatory Authority ($650,000). The bank’s new investing and lending division will deal with all relevant activities for various asset classes, primarily including debt and equity securities, loans, private equity and real estate. The equities and fixed income division as well as the currency and commodities, will now be included in investing and lending. According to a story in Tuesday’s Wall Street Journal, Goldman will release a 63-page report stating that its increased disclosure will create a more transparent method of tracking its earnings. The remaining two segments of Goldman Sachs are investment banking and asset management and securities services. Beginning with the fourth quarter of 2010, investment banking will remain the same in name and also take on derivatives transactions as well as underwriting assignments associated with equities and fixed income, currency and commodities. The asset management and securities services will become known as investment management. Jacob Gaffney is the editor of HousingWire. Follow him on Twitter @JacobGaffney. Write to him.