Abstract The legal suit filed by SEC against the finance bank giant namely Goldman Sachs on the footing that Goldman Sachs has deceived its investors by indulging in a financial scam through its new financial instrument namely Abacus 2007 –AC1. Thus, SEC action may be followed by class action suits by Goldman Sachs shareholders, and Germany, the UK, and AIG are also contemplating filing a separate lawsuit against Goldman Sachs. This research essay will be analyzing how this lawsuit will impact the future of Goldman Sachs business shortly in an exhaustive manner. The Lawsuit Securities and Exchange Commission (SEC) has filed a civil lawsuit during mid-April 2010 on Goldman Sachs, a leading American Banking company accusing that it has engaged in security fraud. SEC alleged in its complaint that the bank designed and traded a mortgage investment that was clandestinely aimed to fail. The lawsuit was the first time that the SEC has initiated action against the deal that assisted investors to derive an advantage on the disintegration of the housing market. The lawsuit was named after the ex vice-president of Goldman namely Fabrice Tourre, who was the brainchild for the creation of this new type of investment instrument namely Abacus 2007 –AC1. The main objective of the SEC litigation centered on an investment vehicle namely Abacus 2007 –AC1 which was one among the twenty-five such vehicles that Goldman Sachs so invented so that some of Goldman’s clients and the bank could lay a wager against the housing market. It was reported that Goldman sold about $10.9 billion of Abacus investments. It is to be observed that this kind of innovative instrument safeguarded Goldman against losses during the sub-prime mortgage crisis when the mortgage market fell and offered huge gains for the bank in later periods. Abacus instrument’s value fell down and due to this; the fund manager was able to enrich huge gains. By designing the Abacus credit instrument, the inventor J.A. Paulson is alleged to have earned profits in billions by anticipating the housing ripple in advance. However, SEC has not included the name of Paulson in the legal suit against Goldman. According to SEC in its allegation that investors were informed by Goldman that Abacus 2007-AC1 would be chosen by an independent fund manager and thus, Paulson was helped by Goldman that facilitate Paulson to choose mortgage bonds that he knew well in advance that it would be most possible to lose its value. Goldman Sachs also sold the Abacus instrument to investors other than Paulson and also to foreign banks like ABN Amro, IKB, and other investors in European Union. It was further alleged that Goldman knowingly facilitated a client who was wagering against the mortgage market to greatly manipulate which mortgage securities to be summed up in an investment portfolio. However, Goldman Sachs refuted the allegations made by SEC that it was unfounded both, in fact, and law and contended that it would ‘strongly challenge them and defend the company’s standing in the court. SEC’s lawsuit against Goldman Sachs can be regarded as an indicator of a revitalizing action that had been condemned for not initiating any steps in evaluating the reasons for the financial crisis. Th