NEW YORK (AP) — Goldman Sachs reaffirmed its leadership among Wall Street banks as it reported its first-quarter profits doubled. But the news was overshadowed by the investment bank's growing legal problems.

As Goldman Sachs Group Inc. executives held conference calls with banking industry analysts and reporters yesterday, the questions focused more on the Securities and Exchange Commission's civil fraud charges against the company rather than its $3.3 billion earnings.

The company said it would set aside $5.5 billion to pay salaries and bonuses for the three-month period.

The SEC charges grow out of a 2007 transaction involving collateralised debt obligations, or CDOs, exotic mortgage-related securities that many analysts say helped accelerate the financial crisis and recession. The government said Goldman Sachs did not tell two clients that the CDOs they bought were crafted in part by billionaire hedge fund manager John Paulson, who was betting on them to fail.

There were signs that there were political overtones to the case. The SEC comissioners approved the charges by a narrow 3-2 vote, according to two people with knowledge of the case. The split was along party lines, with both Republican commissioners arguing strenuously to hold back, said the people, who spoke on condition of anonymity because they were not authorised to discuss the matter.

Party-line split votes are unusual, especially in high-profile cases, former SEC officials said. But they are not unheard of, and are more likely in politically fraught cases, they said.

Goldman Sachs and the other big banks have come under sharp criticism in the Obama administration and in Congress, especially since they have paid big bonuses to employees after having accepted bailout money during the financial crisis in 2008.