LAWMAKERS in the United States plan, as early as Monday, to introduce an amendment to the financial reform legislation being debated by the Senate that aims to ban investment banks from betting against their customers, the Wall Street Journal said.

Senator Carl Levin, in a statement to the Journal, said he was drafting legislation to avoid conflicts of interest by "prohibiting companies from taking the opposite side of the deal for their own account", at least when marketing
investments they created.

The proposal comes amid accusations that Goldman Sachs Group Inc helped inflate the housing bubble and then made billions off the market's collapse.

The U.S. Securities and Exchange Commission has filed a lawsuit against Goldman Sachs alleging the company did not tell investors "vital informatio"  about ABACUS, a synthetic collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities.

Goldman Sachs told the federal Financial Crisis Inquiry Commission in January that the bank packaged complex debt, while also betting against the debt, because clients had the appetite.

Senator Levin and Goldman Sachs could not be reached for comment by Reuters outside regular U.S. business hours.