Friday, April 16, 2010

Blodget: Goldman Sucker-Punched

A solid observation from Henry Blodget, he writes:
Lack of fast response from Goldman suggests SEC sucker-punched the firm....Goldman Sachs) has yet to respond to the fraud charges the SEC slammed the firm with earlier this morning. This suggests the SEC published its complaint without giving the firm a heads-up in advance.

Normally, the SEC is in close communication with the targets of an investigation as the investigation progresses. This is why you often see SEC complaints filed at the same time that a settlement is announced...In this case, however, Goldman appears to have been caught flat-footed...This suggests that the SEC wanted to maximise the headline value of this charge: For the past hour, the SEC and its allegations have consumed the financial press with no response from Goldman.
Note: Goldman is now out with a statement stating that the charges are without merit and that it will fight them.

1 comment:

  1. Looks like they had enough warning to sell 1,000 S&P futures before the announcement.