Goldman Sachs To Spend $621 Million Fine to Settle SEC Fraud Case

Janet Tavakoli is absolutely correct when she says that the SEC is totally incompetent:

Janet Tavakoli and David Fry on Financial Reform & Goldman Sachs Lawsuit

Just to put $621 million into perspective:

Perfect Timing: Goldman Sachs Set to Pay £3.5 Billion in Bonuses For Just 3 Months’ Work! (Times)

“Champagne for EVERYBODY!!!”

Goldman Sachs Likely to Settle SEC Case, Hintz Says: Tom Keene


June 1 (Bloomberg) — Goldman Sachs Group Inc. will probably settle a lawsuit brought by the Securities and Exchange Commission at a cost of a little more than $1 a share, Sanford Bernstein & Co. analyst Bradley Hintz said.

Goldman Sachs’s franchise is “holding it together” amid the accusations of fraud involving a collateralized debt obligation, Hintz said today in an interview with Tom Keene on Bloomberg Radio. Hintz said his price estimate for Goldman Sachs’s stock is still above $200 and said it is the best “buy” among U.S. banks.

“Having your name in the headlines and being an adversary to your regulator is not good for you,” Hintz said. “I think the issue is, when will the settlement come?”

The SEC’s April 16 complaint accused Goldman Sachs of defrauding investors in a CDO linked to home loans known as Abacus 2007-AC1. The firm concealed the fact that Paulson & Co., a New York-based hedge fund, picked components of the CDO and bet it would collapse, the SEC said. Goldman Sachs has said it did nothing wrong and will fight the allegations.

The New York-based firm’s stock has dropped 22 percent since the SEC lawsuit was filed through May 28, making it the worst performer among the 10 largest U.S. banks by assets in 2010. Goldman Sachs reported profit of $22.13 a share in 2009 and $5.59 a share in the first quarter.

Hintz said in a note last week that Goldman Sachs may spend about $621 million to settle the case.

To contact the reporters on this story: Michael J. Moore in New York at mmoor[email protected]; Tom Keene in New York at [email protected]

Last Updated: June 1, 2010 12:15 EDT
By Michael J. Moore and Tom Keene

Source: Bloomberg

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