To read about the industry's concerns and response to theGoldman hearings clickhere

WASHINGTON, DC-As the Senate Governmental Affairs Subcommitteeon Investigations grilled Goldman Sachs Tuesday about the sales ofresidential and commercial mortgage-backed securities, the senatorsagreed they will amend pending legislation to includeconflict-of-interest wording based on the testimony. The company,which earned $500 million in 2007 by balancing long investments onthese securities with short sales against the securities' success,has been charged by the SEC with fraud regarding MBS sales.

Through 11 hours of testimony from Goldman executives, thesubcommittee accused the company of selling securities to somecompanies without telling the buyers that Goldman planned to sellshort on those securities--basically betting against the product."You have salespeople saying they think these products are crap,yet they still sell them while your company bets against them,"said committee chairman Sen. Carl Levin. "You shouldn't be sellingjunk, and you shouldn't be betting against your own customer thesame time you're selling to him."