Goldman Sachs has agreed to pay a $550 million fine to the Securities and Exchange Commission, finally settling a high-profile fraud case over allegations of investor fraud. The investment firm stood accused of hoodwinking clients by selling them dubious mortgage securities that were designed by a hedge fund manager betting against the assets. Though the settlement is being billed as "one of the largest penalties in Wall Street history," a number of financial bloggers think Goldman got off easy. Here's why:
- May Embolden Goldman, writes Felix Salmon at Reuters: "I’m just surprised that they didn’t even get any management changes, or any kind of mea culpa. The risk, of course, is that Goldman’s victory here will only serve to exacerbate its arrogance. Could the Squids of West Street become even more insufferable, now?"
- Nothing Was Learned, sighs John Lounsbury at Credit Writedowns: "The SEC spokesman emphasized the need for accountability. Has accountability been served? ...Nothing was said about 'deliberate' actions. The implication I take away is that the assumption can be made that the entire episode was inadvertent, accidental. I personally do not subscribe to that interpretation."