Goldman Sachs Group Inc said several partners must cover margin calls triggered by the depressed value of Goldman stock and many of the firm's hedge funds, but the bank denied it is lending money to its executives.

Partners can, and many do, have margin accounts at the firm, Goldman spokesman Lucas van Praag told Reuters on Wednesday. To the extent that a margin call is triggered, they, just like anyone else, will receive a margin call. If the call isn't met, the firm will sell stock to cover the shortfall.

Van Praag denied that Goldman was extending loans to executives.

Sarbanes-Oxley specifically precludes firms from lending or facilitating lending to an executive officer, he said. We do not provide partners with loans to cover margin calls.

Goldman shares fell $3.16, or 3.6 percent, to $82.55 in early-afternoon trade on the New York Stock Exchange.

CNBC reported that several Goldman partners were being forced to borrow money to cover margin calls, citing unnamed sources inside the firm. The executives borrowed against their holdings in Goldman stock, held in Goldman accounts, to buy shares in hedge funds and private equity funds launched by Goldman's asset management arm, the report said.

This strategy, which boosted the wealth of partners in good times, backfired last year after many hedge funds plunged in value and Goldman stock sank 60 percent, CNBC said.

News of the margin calls emerged a day after Goldman announced the retirement of co-President Jon Winkelried at the age of 49.

In recent weeks there has been unconfirmed market talk that London-based Winkelried had suffered big losses on his investments in Goldman stock and hedge funds.

The speculation gained currency after Winkelried last fall privately listed a six-acre waterfront estate in Nantucket, Massachusetts, for sale at $55 million. The property was purchased in 1999 for about $7 million.

Goldman declined to comment on Winkelried.

(Editing by John Wallace)

Investment Goldman sachs