Penny-Ante Fine for Goldman Sachs

Penny-Ante Fine for Goldman Sachs

Goldman Sachs Group agreed to pay $550 million in federal fines and damages after misleading investors. That’s what Goldman earns in two weeks, points out the Washington Post‘s  Matt Miller.

Goldman admitted only that its marketing information about the Abacus deal could have been a bit clearer (or weasel words to that effect). The Wall Street firm’s stock price rose after the announcement, adding more than $3 billion to Goldman’s market value, so the payout essentially made the firm $2.5 billion in one day.

There. That should teach them.

What Goldman neglected to tell investors about the Abacus CDO offering: Paulson & Co., the hedge fund which helped design the deal, was betting on its failure. Less charitable people might call such a lapse “fraud.” That such a deal could be allowed to go through at all says much about the state of 21st century finance.

While it appears that the SEC will not pursue the matter any further, Goldman’s woes aren’t over. Banks around the world conned in the mortgage-backed security deal are lining up to sue for additional damages.

 

Image (“Dogs Dealing Unregulated Securities at Goldman Sachs, after C. M. Coolidge”) by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com

Comments are welcome if they are on-topic, substantive, concise, and not boring or obscene. Comments may be edited for clarity and length.

Add to: Facebook | Digg | Del.icio.us | Stumbleupon | Reddit | Blinklist | Twitter | Technorati | Yahoo Buzz | Newsvine

Tags: , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: