NEW YORK (CNNMoney.com) -- Goldman Sachs stock tumbled Friday after a pair of analysts cut their rating on the firm amid reports of a federal criminal investigation into the Wall Street investment bank.
Citing the company's growing legal woes, Matthew Albrecht, a stock analyst for S&P, lowered his rating on the stock to a "sell" from a "hold".
"Though traditionally difficult to prove, we think the risk of a formal securities fraud charge, on top of the SEC fraud charge and pending legislation to reshape the financial industry, further muddies Goldman's outlook," he wrote in a note to clients.
News of a federal probe also prompted Bank of America-Merrill Lynch analyst Guy Moskowski to downgrade the firm Friday, lowering his rating to a "neutral" from a "buy."
"We continue to believe that GS has long-term earnings power beyond what is discounted in the share price," he wrote. "However, it is very difficult to see the shares making further progress until the matter has been resolved."
The ratings cut comes after reports surfaced late Thursday that the company and some of its employees were facing a federal criminal investigation into the dealings of its mortgage-trading operations.
A Goldman spokesperson would not confirm those reports, but said the company was not surprised given the scrutiny surrounding the firm recently. He added that the company would cooperate with any requests for information from authorities.
Another probe would be a major setback for Wall Street's top firm, which has already been reeling from recent civil charges brought against the company by the Securities and Exchange Commission.
Earlier this month, the agency alleged that Goldman defrauded investors in the sale of securities tied to subprime mortgages.
Goldman has been under intense scrutiny ever since. Earlier this week, a group of seven current and former executives at the firm endured a grueling 10-hour hearing from Senate lawmakers over their role in the financial crisis, including bundling and selling toxic mortgage securities.
Union organizers say that fast food workers will strike in more than 150 cities on Thursday. Workers want a $15 minimum wage and protection from retaliation by employers. More
The Coolest Cooler is the most successful Kickstarter campaign in the site's history, raising $13.3 million from over 62,000 backers. More