Goldman Sachs Group Inc. is having a big impact on markets in mid-morning trading, and no, this has nothing to do with earnings.

Investors ran for cover after the U.S. Securities & Exchange Commission announced civil fraud charges against Goldman Sachs, alleging that the financial firm marketed collateralized debt obligations without disclosing that a major hedge fund had bet against the securities.

Stocks certainly took a turn for the worse soon after the news hit the wires. Shortly after 11 a.m. (ET), the S&P 500 was down 18 points or 1.5 per cent, to 1194 – marking the sharpest one-day downturn in more than two months. As for Goldman Sachs, investors are clearly taking these charges very seriously: The shares fell 10.6 per cent.

The shock reverberated elsewhere, too, as investors sought typical safe havens. The U.S. dollar jumped about 1 cent next to the Canadian dollar and U.S. Treasury prices also moved higher, sending yields down.

The higher U.S. dollar also affected the price of gold, which is priced in U.S. dollars. Gold, already weak at the start of the trading day, was down $24 (U.S.) an ounce in mid-morning activity.

Meanwhile, Canadian stocks also fell on the news, as investors retreated from commodities and what are often seen as higher-risk markets. The S&P/TSX composite index fell 130 points, to 12,082.