Tuesday, June 1, 2010

An Update on the Goldman Sachs versus SEC Lawsuit

The clock is ticking on the SEC’s case against Goldman Sachs. Sometime in the next few weeks, Goldman will either go to federal court with a substantive denial of the SEC’s allegations or agree to a settlement.

John Carney emails:
In my latest story at CNBC, I describe a legal strategy that Goldman insiders say may lead to settlement. Goldman has a big problem with the fraud charges and is unwilling to settle any case that continues to allege fraud. The compromise could be a settlement that drops the charges linked to "fraud" and simply charges Goldman with negligently misleading investors in the Abacus deal. Similar settlements have been reached in the Brocade backdating cases.

Here's the link. What's most interesting, in my mind, is that, as John points out, there is no indication from the SEC that they are willing to settle. I continue to believe that their case is extremely weak, but it should be noted this case is being run out of the Washington D.C. office and not the New York office. This has politics written all over it. Sloppy politics, but politics.

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