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Story updated with closing prices.



) --

Goldman Sachs


shares were lower Monday following a report in

The Wall Street Journal

that Federal investigators are pursuing a wide-ranging insider trading case involving several firms.

The report states Goldman investment bankers are being investigated to determine whether they leaked information about healthcare deals. An email message to a Goldman spokesman was not immediately returned.

Goldman shares closed down 3.37% to $161.05 in mid-afternoon trading.

Despite the mention of Goldman, the inquiry appears to be mainly focused on hedge funds, including

SAC Capital

and, according to subsequent reports Monday,

two other hedge funds run by former SAC employees.

Carole Berger, analyst at Luna Analytics, believes other reports contributed to the selloff in Goldman and other big bank stocks. One of these was a report in

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over the weekend arguing Goldman could face $11.2 billion in "putbacks" related to mortgage-backed securities they underwrote and sold to investors, including

Fannie Mae



Freddie Mac





. That is fourth only to

Bank of America



JPMorgan Chase


, which have gotten far more attention from analysts, investors and the press on this issue, and

Deutsche Bank


, which has $14.1 billion in exposure, according to the report, which cites research from Compass Point Research & Trading.

Bank of America shares ended the day down 3.09% to $11.30. JPMorgan closed down 2.28% to $38.51 and Deutsche Bank U.S.-listed shares were down 2.13% to $54.32.

Two other big U.S. mortgage originators fared surprisingly well in terms of potential putback exposure.



came in ninth on the list and

Wells Fargo


wasn't on the list at all. The list included 11 names.

Citigroup shares were down 2.06% to $4.18, while Wells Fargo's stock ended the trading day down 1.96% to $26.95.

Goldman Sachs spokesman Michael DuVally disputed the Compass Point report in an email exchange with



"Many of the assumptions used in this report are quite simply wrong. The calculations of liability are grossly overstated and the lawsuits the report references would all be subject to valid defenses, which we would assert," he wrote.

Also weighing on bank stocks, in Berger's view, was a Barclays Capital report stating the top 35

U.S. banks will need $100 billion to $150 billion in new equity capital between

now and 2015 to meet regulatory requirements.

Berger nonetheless believes the threat of tougher rules and more zealous federal investigators and regulators are mostly reflected in the stock prices of Goldman and other big banks.

"The stocks generally reflect this environment that political risk is elevated," she says.


Written by Dan Freed in New York


Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.