The big omission in the Goldman Sachs-SEC settlement?

Federal Judge Barbara Jones has approved the $550 million settlement between Goldman Sachs (NYSE: GS) and the SEC, which must have prompted a sigh of relief by both sides. Needless to say, the approval doesn't sit well with the numerous critics of the deal--most of whom say the agreement doesn't do enough to punish the gilded firm. Some were hoping for a Judge Jed Rakoff-like refutation of the settlement, one that would force both sides to defend it. Alas, that did not happen.

This means there will likely be no consequences for the Wells notice matter. Recall that Goldman Sachs chose not to inform shareholders that it had received such a notice regarding the ABACUS CDO in question. While that falls into a grey zone legally, a commentator for TheStreet.com notes that "the famously 'surprising' SEC lawsuit, which took stunned investors and caused Goldman shares to plunge, was really no surprise at all. Even though Goldman co-general counsel Greg Palm told analysts at an April conference call that 'nobody told us in advance,' Goldman, in fact, had formal notice that charges were pending."

Indeed, it had received a Wells notice by then. The commentator suggests this was misleading. But the firm may have been referring to the fact that they were not given a specific heads up that the SEC was on the verge of filing the charges in court.

For more:
- here's the commentary

Related Articles:
Will the Goldman Sachs settlement with the SEC be approved
When should a company disclose a Wells notice?
Disclosure issue? Goldman Sachs executives knew about SEC complaint nine months ago

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