For Goldman Sachs Group Inc.’s Special Situations Group, disasters can be a source of some of the biggest profits. Now the secretive investing operation faces its own potential calamity.

Goldman Sachs already has shut two units that made bets with the company’s money because such proprietary trading by banks will be prohibited under the Volcker rule approved by Congress last year. Still, the Special Situations Group, known as SSG, continues to make investments and named a new global head last month. Executives have argued that SSG shouldn’t be affected because it’s more of a lending than a trading business.  Read More