British bank regulator probes Goldman

Britain's financial regulator said Tuesday it is opening a formal investigation into Goldman Sachs, following charges filed Friday by the Securities and Exchange Commission (SEC).

The SEC charged Goldman with defrauding investors in securities based on subprime mortgages. The Financial Services Authority (FSA), Britain's regulator, said in a short statement that it is starting its own enforcement probe.

"Following preliminary investigations the FSA has decided to commence a formal enforcement investigation into Goldman Sachs International in relation to recent SEC allegations," the regulator said.

The FSA said it would be working closely with U.S. authorities.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) said this week that financial overhaul legislation pending in Congress would have prevented the types of actions that Goldman is alleged to have taken.