One week after Goldman Sachs (GS) execs were battered by a Senate committee during a hearing into the firm’s role in the financial crisis, FBN’s Charlie Gasparino reports that talks to settle the fraud charges leveled against Wall Street’s alpha dog by the SEC could begin as early as Tuesday.
FBN: “People familiar with the matter say attorneys for the embattled Wall Street firm plan to initiate settlement talks soon after the firm releases its response to the SEC’s charges, and FOX Business has learned that Goldman may unveil that response imminently, possibly Tuesday.
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But people close to the commission say the SEC may not be so willing to settle lightly, particularly in light of the fact the Department of Justice has launched its criminal probe. According to one attorney who regularly deals with the SEC, the commission could seek a fine of as much as $1 billion — one of the largest on record against a major Wall Street firm — and could demand the resignation of senior management, such as CEO Lloyd Blankfein and his No. 2, Gary Cohn, as bargaining chips.”
Given the bank’s unwavering claim of innocence, a settlement seems a little surprising. But on the other hand, settling the SEC case makes sense at this point for Goldman. The firm probably feels that it’s worth paying up instead of going to battle with regulators.
I don’t think it’s surprising at all. The SEC can’t afford to lose. That’s what’s at stake.