US equities slid sharply in NY morning trading as SEC charges were brought against investment banking giant Goldman Sachs. The SEC charged Goldman with defrauding investors by omitting key facts about a financial product related to subprime mortgages.

Via marketwatch: “The SEC alleged in a lawsuit that Goldman structured and marketed a collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities. However, it failed to disclose the role that a major hedge fund, Paulson & Co., played in the portfolio selection process as well as the fact that the hedge fund had taken a short position against the CDO.”

As of noon NY time, the news sent the Dow Jones Index to just below the 11K level following a 140 point slide, with the S&P 500 was off 1.8% to 1,190. Gold and oil prices plunged 2.4% and 2.95%, respectively.

In currency markets the Yen was a big benefactor as traders and investors took risk off the table and cut carry-trade positions.

The USD/JPY fell below is low for this week at 92.55, sliding all the way to 91.90 in the NY morning session. That broke the pair out of its consolidation levels between 92.55 and 93. 80 that had constrained this pair the past 6 sessions.The EUR/JPY and GBP/JPY pairs had strong declines as well.

The USD/CAD pair rose in favor of the greenback as oil prices took a tumble in the atmosphere of heightened risk aversion. The pair broke above its downward sloping resistance trendline at the 1.0050 level and then its horizontal resistance at 1.01. Here too we see a move out of consolidation following our test of parity and we now see the market further correcting the downmove we had in the pair from 1.03 to 0.9950.