The Financial Services Authority said on Monday it was looking into US fraud charges against Goldman Sachs after Prime Minister Gordon Brown, accusing the bank of “moral brankruptcy”, urged a probe.

“As you would expect the FSA is investigating the circumstances of this case and whether there are any implications for the UK regulated entities of Goldman Sachs,” an FSA spokesperson said in a statement.

“If there are, we will take appropriate action. We work closely with overseas regulators and will be cooperating fully with the SEC’s investigation.”

The FSA stressed that the regulator was not at this stage launching an official probe of its own.

The US Securities and Exchange Commission (SEC) last week charged Wall Street titan Goldman Sachs with fraud over the sale of a type of complex mortgage product blamed for the financial meltdown.

Brown, whose Labour Party is battling to hold onto power at a general election due on May 6, had on Sunday said that the US charge against Goldman underlined the need for more reform of the international banking system.

He also hit out after The Sunday Times reported that Goldman was planning to pay its staff a total bonus pool worth 3.5 billion pounds for work achieved in just the first quarter of 2010.

Goldman Sachs employs 5,500 staff in London.

In Germany, Chancellor Angela Merkel’s government said that the country’s financial regulator Bafin had requested further information from SEC on its investigation.

One of the banks caught up in the alleged fraud was German lender IKB, which had to be partially nationalised and rescued with billions of euros (dollars) of public money as the first major casualty in Germany of the global financial crisis.

“We will examine the extent to which this possible damage claims are possible with regard to IKB,” a spokeswoman for the German finance ministry said on Monday.

“I would add however that IKB is no longer state-owned, it was sold. So it would have to examined who exactly might make a claim.”

The US watchdog has accused Goldman Sachs of “defrauding investors by misstating and omitting key facts” about the product that was based on subprime mortgage-backed securities.

Speaking to BBC television on Sunday, Brown said: “I am shocked at this moral bankruptcy. This is probably one of the worst cases that we have seen.” The PM added: “It makes me absolutely determined we are going to have a new global constitution for the banking system which I am pressing for, a global financial levy for the banks, and we quash remuneration packages.”

Brown said he believed he was the right person “to deal with these problems of the banks and to challenge them about the way they behave in the future”.

Regarding the alleged happenings at Goldman Sachs, he added: “Hundreds of millions of pounds have been traded here and it looks as if people were misled about what happened.

“I want the Financial Services Authority to investigate it immediately. We will work with the Securities and Exchange Commission in the United States.

“The banks are still an issue, they are a risk to the economy. We have got to make sure they behave in a proper way,” Brown had said on Sunday.

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