Clients of Goldman Sachs are standing behind the bank after the top U.S. securities regulator slapped fraud charges against the Wall Street powerhouse over its marketing of a subprime mortgage product.

In Asia, Goldman's corporate clients appeared to be content to stay with the firm despite the legal storm that surrounded the investment bank after Friday's fraud charges from the U.S. Securities and Exchange Commission.

Asia regulators also seemed willing to wait and see how the SEC case against Goldman played out rather than making any judgments on their own.

With the financial world still sorting through the details of the Goldman case, it's unlikely Goldman's clients would take any drastic action against the bank while the matter was in its early stages.

Goldman Sachs is just the first to get rapped on its knuckles. The other big Wall Street banks will also have their turn. Nobody is 100 percent safe, said a Hong Kong-based hedge

fund manager who uses Goldman Sachs' prime brokerage services.

The fund manager declined to be identified due to the sensitive nature of the case.

Scrutiny of how Goldman handled its position on the U.S. housing market is not new and has been the subject of media attention since the financial crisis.

Still, the SEC charges against Goldman were both extraordinary and a surprise and could hurt the bank should the federal case succeed.

CLIENTS STAY WITH GOLDMAN

That prospect did not seem to bother some of Goldman's top clients in Asia on Monday.

One of those clients was South Korea's Samsung Life, the country's largest insurer, which has retained Goldman to help handle the company's $4.5 billion IPO.

I don't see any impact on the IPO process, said a Samsung Life official, who was not authorized to speak publicly about the matter.

Goldman for years enjoyed a duopoly with Morgan Stanley in Asia's prime broking space -- the part of the bank that services hedge fund clients.

While some European banks have encroached on the duopoly lately, Goldman still remains a strong force in the hedge fund sector across Asia. That status did not seem to be threatened on Monday.

Goldman has called the lawsuit completely unfounded, adding, We did not structure a portfolio that was designed to lose money. A Hong Kong-based Goldman spokeswoman declined to comment on the issue on Monday.

REGULATORS KEEP CLOSE EYE

A South Korean financial regulatory source said the authorities were closely following the developments and have no specific plan at this moment to do anything.

And there is nothing that local authorities can do in relation to Goldman's operations in general because the two sides -- Goldman and U.S. SEC -- are still involved in the dispute, the source said.

That stance was echoed across Asia on Monday, in financial centres such as Jakarta and Hong Kong.

A Hong Kong Securities and Futures spokeswoman said the regulator would not comment on individual cases.

The feeling amongst sources in Asian regulatory agencies was that the subprime debt securities sold in the United States and Europe -- securities that played a key role in the financial crisis -- were almost non-existent in Asia.

The lack of such securities in Asia were a major reason why the region was able to recover more quickly from the financial crisis, a reason why Asia regulators' response to the Goldman subprime case was muted.

(Additional reporting by So-eui Rhee and Choonsik Yoo in Seoul and Sara Webb in Jakarta; Writing by Michael Flaherty; Editing by Jean Yoon)

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