Goldman Sachs says ‘It’s not our intention to mislead’

Goldman Sachs Group Inc., facing a fraud lawsuit from U.S. regulators, said it would never intentionally mislead investors.

“We would never intentionally mislead anyone, certainly not our clients or our counterparties,” Goldman Sachs Co-General Counsel Greg Palm said today on a conference call with analysts. “We have never condoned and would never condone inappropriate behavior by any of our people. On the contrary, we would be the first to condemn it and take all appropriate action.

‘‘Our responsibilities as a financial intermediary require it and our commitment to integrity and the firm’s business principles demand it,’’ Palm said.

Palm said Goldman Sachs had ‘‘no incentive’’ for the deal to fail, and lost more than $100 million on the transaction.

Goldman Sachs, led by Chief Executive Officer Lloyd Blankfein, finds itself fending off regulatory claims while and cementing its position as the most profitable investment bank in Wall Street history. The Securities and Exchange Commission accused the firm of failing to tell investors in a 2007 collateralized debt obligation that hedge fund Paulson & Co., which planned to bet against the CDO, helped select the underlying assets.

Blankfein, 55, didn’t refer specifically to the suit today, saying in a statement, “In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people.”

Shareholders said concern about potential fallout from the accusations would supersede the earnings report. The stock, which fell 13 percent on April 16 after the SEC filed its case, fell $1.17 to $162.15 at 9:38 a.m. in New York Stock Exchange composite trading.

Ralph Cole, a senior vice president in research at Ferguson Wellman Inc., is among investors who said they are concerned the case could hurt Goldman Sachs’s reputation and cause clients to switch their business to other firms. Another worry is that the case could lead to additional lawsuits against the bank and add impetus to financial-reform efforts that would erode Goldman Sachs’s earnings potential.

“I don’t think the cost of this one suit’s the big deal, not certainly compared to what they make,” said Cole, whose firm manages $2.6 billion including Goldman Sachs stock. “It’s what does this do to their reputation and what does this do to the industry because of the current legislation going through?”

In the U.K., meantime, Britain’s financial regulator said Goldman Sachs’s London units will be formally investigated for fraud. “The Financial Services Authority has decided to commence a formal enforcement investigation into Goldman Sachs International in relation to recent SEC allegations,” the FSA said in an e-mailed statement.