Goldman Sachs Said to Ask More Time for Lawsuit Reply (Update2)

June 18 (Bloomberg) -- Goldman Sachs Group Inc. asked for more time to respond to the U.S. Securities and Exchange Commission’s April 16 lawsuit accusing the firm of defrauding investors while selling mortgage-linked securities, said two people with direct knowledge of the matter.

The company submitted the request today to the judge overseeing the case, asking for an extension until July 19, the people said. The original deadline was June 21, court documents show. The SEC consented to the New York-based firm’s proposed extension, according to one of the people.

The SEC said New York-based Goldman Sachs and one of its employees, Fabrice Tourre, didn’t disclose to investors the role played by hedge fund Paulson & Co. in devising and betting against the securities. Tourre also has until July 19 to respond, according to court documents.

Goldman Sachs, the most profitable firm in Wall Street history, has denied the SEC’s allegations and said it will fight the case. Company spokesman Lucas van Praag said he couldn’t comment today.

“It’s no great surprise because it just gives them some more breathing room,” said Peter Henning, a former SEC enforcement attorney who teaches at Wayne State University Law School in Detroit. “It keeps them from having to deny the allegations and gives them more time to either negotiate a settlement or prepare their case.”

To contact the reporters on this story: Joshua Gallu in Washington at jgallu@bloomberg.net; Christine Harper in New York at charper@bloomberg.net.