Goldman Sachs is considering changing the way it handles initial public offerings (IPO) and reforming its stock research after US congressional investigators accused the firm of misconduct.

Goldman and other Wall Street investment banks are discussing ways to make the IPO process more transparent to repair their credibility among retail investors and forestall new regulation and potentially crippling lawsuits.

The effort comes amid revelations by a congressional committee that Goldman awarded IPOs to top executives at 21 companies, including eBay, Enron, Tyco and WorldCom, that were also investment banking clients. The committee said the executives often sold the shares for quick profits, on the day they were awarded. It also accused Goldman's research analysts of failing to downgrade companies even after they headed for bankruptcy. The findings drag Goldman into the focus of securities regulators probing "spinning" at the Salomon Smith Barney unit of Citigroup, Credit Suisse First Boston and other investment banks.

Critics claim Wall Street firms rewarded senior executives with IPO shares in hopes they would repay them with their companies' investment banking business.

News of the discussions came as Mr Eliot Spitzer, the New York attorney-general, struck a deal to work with the Securities and Exchange Commission and other regulators to design reforms that could create a global settlement for the securities industry.

The pact and the Goldman discussions raised hopes that there could be an early resolution to the regulatory problems facing investment banks. Goldman said there was no evidence to suggest the IPOs were awarded in exchange for banking business and called the committee's findings "an egregious distortion of the facts".

Mr Peggy Peterson, a spokesperson for Mr Michael Oxley, chairman of the House Financial Services committee, said the committee would share its findings with securities regulators. "There are a lot of things here that are not illegal, but are surely wrong," Ms Peterson said.Among the beneficiaries were Mr Kenneth Lay, former chief executive of the bankrupt energy trading firm Enron, and Mr Dennis Kozlowski, disgraced former chief executive of Tyco International.

Others within the circle of 21 firms included Ms Margaret Whitman, chief executive of eBay, the online auction house. Ms Whitman is also a director of Goldman Sachs.