The Securities and Exchange Commission (SEC) has charged Goldman Sachs with civil fraud for failure to make certain disclosures. The news sent exchange traded funds (ETFs) south, and the Dow Jones Industrial Average is close to going below 11,000.

It came as a surprise: Goldman Sachs (NYSE: GS) has been accused by the government of defrauding investors by failing to properly disclose conflicts of interest. The conflicts of interest come from mortgage investments that it sold as the housing market was showing the first signs of cracking. This is the biggest legal action so far stemming from the events that precipitated the global financial crisis.

Naturally, financial-related ETFs this morning are sinking on the news.  Financial Select Sector SPDR (NYSEArca: XLF) is down nearly 4%; iShares Dow Jones U.S. Financial Services (NYSEArca: IYG) is down nearly 4%, as well. Goldman Sachs stocks sank 12% after the news was reported. Will other banks get sued? If so, it could hit these and other financial ETFs hard; have your stop-loss at the ready, just in case. You can read the full complaint on the SEC’s website. [6 ETFs for a Financial Sector Recovery.]

General Electric (NYSE: GE), one of the major bellwethers, reported that first-quarter income fell 32% from a year earlier. But that’s good news – analysts had expected worse. Earnings were down 18% from the first quarter a year earlier. The company’s CEO said they’re optimistic about the recovery and GE’s position in it.  iShares Dow Jones U.S. Industrial (NYSEArca: IYJ) holds a 10.9% weighting in GE. [Top ETFs to Play Growing Industrial Activity.]