When faced with significant threats to self-preservation, desperate people will take desperate actions. This reality is not always displayed in public but the reality is the backroom dealings which lead to legal settlements are truly high stakes poker games.
On this note, for those interested in the markets and economy, who would not want to be a fly on the wall or a bug in the phone as dialogue and discourse flies back and forth between Goldman Sachs and officials from the Securities and Exchange Commission (SEC), Department of Justice (DOJ), Financial Industry Regulatory Authority (FINRA), Congressional subcommittees, and even the White House.
No firm on Wall Street has more firepower in terms of political and financial connections than Goldman Sachs. While we should expect to see Goldman work on its public image with nice ads about helping the community, don’t think for a second that behind the scenes Goldman is not playing a very aggressive hand.
Do you think Goldman might go so far as to threaten to leak sensitive and confidential information on regulatory failings? Such as? Think Goldman might threaten to leak conflicts of interest within FINRA? Think Goldman might leak questionable relationships between regulators and Wall Street executives? Think Goldman might leak questionable financial contributions from Wall Street to Washington?
Far fetched? I do not think so. We would likely never know what is going on behind the scenes but rest assured the nature of a firm such as Goldman Sachs is not to sit idly by and purely play defense.
Why did Goldman Sachs spend so much time, effort, and money in developing relationships in and around Washington? Just so they could get invited to a few holiday parties? No!! Those relationships and the resulting flow of information bring real leverage.
Rest assured, Goldman knows all about using leverage.