Goldman Sachs Group Inc. and investment bankers were winners in 2006 as a record $3.7 trillion in mergers and surging stock prices pushed Goldman’s profits and Wall Street bonuses to new highs.

Amaranth Advisers LLC topped the losers list after bad energy trades drove it out of business in the biggest hedge-fund collapse to date. More than 190 companies, including Apple Computer Inc., were caught in a wave of options backdating that led to earnings restatements and government probes.

The year was dominated by deals and dealmakers. Buyout firms such as Blackstone Group LP and Carlyle Group announced a record $718 billion in private-equity and management takeovers, including the two biggest leveraged buyouts.

“It’s been a boom year for M&A, private equity, and for the financial services world,” chief executive officer of Chicago-based executive search firm Challenger, Gray & Christmas, John Challenger, said.

Corporate winners included Exxon Mobil Corp., the world’s biggest energy company, whose shares rose the most in 26 years. AT&T Inc. claimed a victory on the last business day of the year when the Federal Communications Corp. on December 29 approved its $86 billion purchase of Bell-South Corp.

U.S. automakers General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler lost money and market share. Yahoo! Inc., operator of the most-visited U.S. Internet site, gave up a third of its market value, and Dell Inc. yielded its ranking as the world’s No. 1 maker of personal computers. Wal-Mart Stores Inc., the biggest retailer, lost sales momentum.

Fueled by trading profits, underwriting, and investments, Goldman’s earnings rose 70% to $9.54 billion in the year ended Nov. 24, the most ever for a Wall Street firm.

Goldman Chief Executive Officer Lloyd Blankfein was rewarded with a record $53.4 million bonus in cash, stock and options. His Morgan Stanley counterpart, John Mack, pocketed $40 million, while Bear Stearns Cos. Chief James Cayne received about $34 million, according to data compiled by Bloomberg.

Bonuses at the five largest U.S. investment firms — Goldman, Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc., and Bear Stearns — rose 30% to $36 billion.

U.S. stocks posted their best annual gain since 2003. The Dow Jones Industrial Average rose 16% and closed at an all-time high of 12,510.57 on December 27. The increase was the Dow ‘s fourthstraight yearly rise.

Exxon Mobil shares rose 36%, their biggest gain since 1980, as crude prices averaged a record $66.25 for the year even after sliding from their July peak of $78.40. The Irving, Texas- based company’s net income is forecast to reach $38.5 billion for the year, based on analysts surveyed by Bloomberg, topping last year’s $36.1 billion, the most ever earned by a U.S. corporation.

AT&T shares rose 46% and closed the year at a four-year high. The San Antonio-based company’s acquisition of BellSouth is the biggest takeover in the American telephone industry.

In July, Bain Capital LLC, Kohlberg Kravis Roberts & Co., Merrill Lynch and Thomas F. Frist Jr., co-founder of HCA Inc., the largest American hospital chain, agreed to buy HCA for $33 billion. That surpassed the previous LBO record of $31.3 billion, KKR’s purchase of RJR Nabisco Inc. in 1989.

Four months later KKR rival Blackstone, which raised the world’s biggest buyout fund of $15.6 billion in July, said it would buy billionaire Sam Zell’s Equity Office Properties Trust for $36 billion.

Amaranth founder Nicholas Maounis’s Greenwich, Connecticut, hedge fund went under in September, after losses on energy trades wiped out 70% of its $9.5 billion in assets. The losses stemmed from Maounis’s decision to promote Brian Hunter, a natural gas trader, to lead Amaranth’s energy desk without supervision.

“Amaranth’s demise is not due to some complicated quantitative reason, it’s about human failing and frailty,” a New York-based money-management firm recruiter Higdon Partners LLC, Hank Higdon, said in an interview December 6.

The backdated-options scandal escalated, claiming at least 65 executives and directors who resigned or were fired, according to data compiled by Bloomberg. The U.S. Securities and Exchange Commission is investigating whether companies manipulated the date options were granted to make them more valuable to holders.

William McGuire stepped down as chief executive and chairman of UnitedHealth Group Inc., the largest health insurer in America, in November after an independent inquiry found evidence that the company options were backdated over the past 12 years.

Jacob “Kobi” Alexander, former CEO of Comverse Technology Inc., was a fugitive in Namibia after he was charged in August with securities fraud related to backdating. Gregory Reyes, former chief executive at Brocade Communications Systems Inc. and the first to face criminal charges in the scandal, is scheduled to go on trial in June.

On December 29, Apple exonerated CEO Steve Jobs from wrongdoing after finding that he didn’t benefit financially from improper grants though he recommended that options held by others be backdated. Apple said it will record $84 million in charges to correct its accounting for the options.

Jeffrey Skilling, who headed energy giant Enron Corp. before it became the second-biggest bankruptcy in American history, was found guilty of accounting fraud and sent to prison for 24 years. L. Dennis Kozlowski, who made $300 million from 1998 to 2002 as CEO of Tyco International Ltd., was making a dollar a day at a New York state prison.