This story was updated at 7:10 p.m. ET with comment from Goldman Sachs. 
 
 Goldman Sachs put its own interests ahead of its clients in trying to profit off the souring housing market of 2007, documents released Monday show. 
 
 The firm, which had profited handsomely off packaging and selling securitized subprime home mortgages to investors during the housing boom, switched directions in early 2007, furiously shedding its home mortgage-linked risk and buying as much insurance as it could, effectively shorting the market throughout the year -- a move that netted the firm "billions and billions" at the expense of its clients, according to the documents released by the Senate Permanent Subcommittee on Investigations. 
 
 "Goldman Sachs made billions of dollars from betting against the housing market, and it placed those bets in some cases at the same time it was selling mortgage-related securities to its clients," said the committee's chairman, Carl Levin (D-Mich.). "They have a lot to answer for." 
 
 Goldman says it always puts its clients' interest first. It's a position the firm has stuck by as Levin's investigation has produced emails and internal documents apparently showing otherwise. 
 
 "Our clients' interests always come first," Goldman says on its website. 
 
 But by late 2006, company officials, presciently realizing that losses from subprime mortgage-related products would soon begin to mount, began to aggressively reduce the firm's risk. It did so by reducing its inventory of positions, and by betting against subprime-related securities, the documents show. 
 
 "A very profitable year was underway," Levin said. 
 
 "In 2007, when Goldman Sachs took steps to reduce its inventory of mortgage-related investments, the Goldman Sachs sales force was instructed to sell those investments, including high-risk...securities that Goldman Sachs wanted to get of its books, creating a conflict between the firm's proprietary interests and the interests of its clients," the panel said in a statement. 
 
 The firm was "spreading the poison throughout the system," Levin charged, adding that investors had a "reasonable assumption [the securities] were designed to succeed." 
 
 One particular security, named Timberwolf I, a collateralized debt obligation of other collateralized debt obligations that were based not on actual home mortgage bonds but instead on those bonds' movements, lost 80 percent of its value within five months of issuance. A senior executive, Tom Montag, remarked in a June 22, 2007, email, "Boy, that timberwo[l]f was one shi**y deal." 
 
 That security was rated less than three months prior to Montag's email. He has since left the firm. 
 
 Goldman "cannot portray itself as working on behalf of clients," Levin said. It sold securities "that it clearly didn't believe in." 
 
 "[D]uring the early summer of 2006 it was clear that the market fundamentals in subprime and the highly levered nature of CDOs was going to have a very unhappy ending," one top executive, Michael Swenson, wrote in September 2007 in his annual self-evaluation. 
 
 In a March 2007 memo, the firm noted that it was "Game Over" for subprime as there was an "accelerating meltdown for subprime lenders such as Fremont and New Century." 
 
 An email the same month remarked that "overall as a business, we are selling our longs and covering our shorts." 
 
 Part of the problem, Levin said, was that Goldman didn't tell its clients it was shorting the market throughout the year -- it waited until the end of the year. 
 
 At times, Goldman had a net short position as large as $13.9 billion, according to a memo prepared by Levin's investigators. 
 
 In shorting the very securities it was peddling to investors, Goldman told its customers that there were a variety of other investors shorting those securities, investigators said. In at least a few of those instances, though, Goldman was the only party shorting the securities, investigators said, raising questions about possible violations of securities law. 
 
 The firm states in its most recent annual report that it "did not generate enormous net revenues by betting against residential related products." 
 
 In a statement to the Huffington Post, the firm's top spokesman, Lucas Van Praag, said: 
 
 "We respectfully disagree with Chairman Levin's statement. We did not have a big bet against the housing market, as our performance in residential mortgages demonstrates, and we believe we at all times worked appropriately with our clients. We did try to manage our risk, as our shareholders and regulators would expect. There are many lessons from the financial crisis, and we are intent on learning from them. To that end, we support strong regulatory reform to safeguard markets for the future." 
 
 Levin says the firm made as much as $3.7 billion shorting the market -- proprietary trades that only benefited the firm, and not its clients. Evidence that the firm was heavily shorting the market -- rather than just hedging its risks -- is overwhelming, investigators said. 
 
 "Company documents show the firm taking every opportunity during early 2007 to take short positions against mortgages," the panel said in a statement. "And in reducing its risk, the firm aggressively sold its mortgage holdings to clients. 
 
 "Documents show the firm's sales force raising questions about the quality of securities Goldman was trying to unload, and complaints from clients who posted big losses on products Goldman had sold them." 
 
 The panel's nearly 18-month-long investigation has yielded about 2 million documents, investigators said. Its hearing examining Goldman Sachs, featuring both current and former executives, begins 10 a.m. ET Tuesday. 
 
 READ Goldman Sachs CEO Lloyd Blankfein's prepared remarks before the panel below: ||||| “It was one of the worst days of my professional life, as I know it was for every person at our firm,” Mr. Blankfein said. “We have been a client-centered firm for 140 years, and if our clients believe that we don’t deserve their trust we cannot survive.” 
 
 Mr. Blankfein will also testify that Goldman did not have a substantial, consistent short position in the mortgage market. 
 
 But at the press briefing in Washington, Carl Levin, the Democrat of Michigan who heads the Senate committee, insisted that Goldman had bet against its clients repeatedly. He held up a binder the size of two breadboxes that he said contained copies of e-mail messages and other documents that showed Goldman had put its own interests first. 
 
 “The evidence shows that Goldman repeatedly put its own interests and profits ahead of the interests of its clients,” Mr. Levin said. 
 
 Mr. Levin’s investigative staff released a summary of those documents, which are to be released in full on Tuesday. The summary included information on Abacus as well as new details about other complex mortgage deals. 
 
 On a page titled “The Goldman Sachs Conveyor Belt,” the subcommittee described five other transactions beyond the Abacus investment. 
 
 One, called Hudson Mezzanine, was put together in the fall of 2006 expressly as a way to create more short positions for Goldman, the subcommittee claims. The $2 billion deal was one of the first for which Goldman sales staff began to face dubious clients, according to former Goldman employees. 
 
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 “Here we are selling this, but we think the market is going the other way,” a former Goldman salesman told The New York Times in December. 
 
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 Hudson, like Goldman’s 25 Abacus deals, was a synthetic collateralized debt obligation, which is a bundle of insurance contracts on mortgage bonds. Like other banks, Goldman turned to synthetic C.D.O.’s to allow it to complete deals faster than the sort of mortgage securities that required actual mortgage bonds. These deals also created a new avenue for Goldman and some of its hedge fund clients to make negative bets on housing. 
 
 Goldman also had an unusual and powerful role in the Hudson deal that the Senate committee did not highlight: According to Hudson marketing documents, which were reviewed on Monday by The Times, Goldman was also the liquidation agent in the deal, which is the party that took it apart when it hit trouble. 
 
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 The Senate subcommittee also studied two deals from early 2007 called Anderson Mezzanine 2007-1 and Timberwolf I. In total, these two deals were worth $1.3 billion, and Goldman held about $380 million of the negative bets associated with the two deals. 
 
 The subcommittee pointed to these deals as examples of how Goldman put its own interests ahead of clients. Mr. Levin read from several Goldman documents on Monday to underscore the point, including one in October 2007 that said, “Real bad feeling across European sales about some of the trades we did with clients. The damage this has done to our franchise is very significant.” 
 
 As the mortgage market collapsed, Goldman turned its back on clients who came knocking with older Goldman-issued bonds they had bought. One example was a series of mortgage bonds known as Gsamp. 
 
 “I said ‘no’ to clients who demanded that GS should ‘support the Gsamp’ program as clients tried to gain leverage over us,” a mortgage trader, Michael Swenson, wrote in his self-evaluation at the end of 2007. “Those were unpopular decisions but they saved the firm hundreds of millions of dollars.” 
 
 The Gsamp program was also involved in a dispute in the summer of 2007 that Goldman had with a client, Peleton Partners, a hedge fund founded by former Goldman workers that has since collapsed because of mortgage losses. 
 
 According to court documents reviewed by The Times on Monday, in June 2007, Goldman refused to accept a Gsamp bond from Peleton in a dispute over the securities that backed up a mortgage security called Broadwick. A Peleton partner was pointed in his response after Goldman refused the Gsamp bond. 
 
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 “We do appreciate the unintended irony,” wrote Peter Howard, a partner at Peleton, in an e-mail message about the Gsamp bond. 
 
 Bank of America ended up suing Goldman over the Broadwick deal. The parties are awaiting a written ruling in that suit. Broadwick was one of a dozen or so so-called hybrid C.D.O.’s that Goldman created in 2006 and 2007. Such investments were made up of both mortgage bonds and insurance contracts on mortgage bonds. 
 
 While such hybrids have received little attention, one mortgage researcher, Gary Kopff of Everest Management, has pointed to a dozen other Goldman C.D.O.’s, including Broadwick, that were mixes of mortgage bonds and insurance policies. Those deals — with names like Fortius I and Altius I — may have been another method for Goldman to obtain negative bets on housing. 
 
 “It was like an insurance policy that Goldman stuck in the middle of the sandwich with all the other subprime bonds,” Mr. Kopff said. “And it was an insurance policy designed to protect them.”
– Goldman Sachs sold investors a mountain of securitized subprime mortgages throughout the housing boom, but when things started to turn sour, they bet against those assets furiously—sometimes while still selling them, according to documents the Senate Permanent Investigations Subcommittee intends to browbeat the company with today. “They have a lot to answer for,” says Chairman Carl Levin. But Goldman insists that it always put clients first, the Huffington Post reports. “If our clients believe that we don’t deserve their trust, we cannot survive,” CEO Lloyd Blankfein will say according to his prepared testimony. But the committee's accusations go beyond the SEC's, the New York Times explains. It details, for example, at least one product Goldman created with the specific intention of betting against it as soon as it was sold.