July 16, 2010
- A d v e r t i s e m e n t
It may have been a record fine for a financial institution but it appears investment bank Goldman Sachs got off lightly. The whole affair brings in to question the strength of the Securities and Exchange Commission’s case.
The “great vampire squid wrapped around the face of humanity” agreed to pay $550 million to settle fraud charges. But crucially it did not admit guilt for misleading clients over subprime mortgage products.
Even the SEC appears to have decided no fraud was committed and accepts the Goldman made a “mistake” in its marketing material. It has failed to hold Goldman’s feet to the fire, even if no one can question the size of the fine.
What is $550 million to Goldman Sachs? Well, two weeks earnings or the total compensation for about 1000 of its 32,000 employees.