SEC and Goldman have not reached settlement: sources

WASHINGTON Fri May 21, 2010 1:47pm EDT

Traders work in the Goldman Sachs booth on the floor of the New York Stock Exchange in New York May 10, 2010. REUTERS/Lucas Jackson

Traders work in the Goldman Sachs booth on the floor of the New York Stock Exchange in New York May 10, 2010.

Credit: Reuters/Lucas Jackson

WASHINGTON (Reuters) - Regulators and Goldman Sachs Group Inc (GS.N) have not reached an agreement to settle civil fraud charges, sources familiar with the matter said on Friday.

Goldman's stock was up as much as 5.4 percent earlier on Friday on rumors of a possible settlement with the Securities and Exchange Commission and a feeling that the shares could be oversold, market sources said on Friday.

The SEC has accused Goldman of creating and marketing a debt product linked to subprime mortgages without telling investors that a prominent hedge fund helped choose the underlying securities and was betting against them.

(Reporting by Rachelle Younglai; Editing by Lisa Von Ahn)