The debate surrounding the SEC-Goldman Sachs dog fight over the ABACUS CDO deal that exploded involves whether Goldman should have disclosed to shareholders that it had received a Wells Notice, which basically informed it that the SEC was intending to bring some sort of enforcement action. Most experts agreed that the bank had a case for not disclosing the event, even though many other companies likely would have.

In the United Kingdom, however, the Financial Services Authority has levied a $30 million fine--its second largest ever--on Goldman, saying it had a duty to inform the FSA that it had received such a notice and noting that the compliance function broke down.

While this is a drop of water on the bank's back, it does seem really high to some. The highest ever FSA fine came last year, when JPMorgan was fined nearly twice as much for failing to separate firm money from client money. Shell was fined about the same as Goldman for misstating reserve positions.

"The FSA's position, rather, is that Goldman is a big, sophisticated firm, it should know better, and the fine is designed to send 'a message' to other firms that such slips will not be tolerated," notes The Telegaph. 

The main issue is the Wells Notice that Fabrice Touure received in September 2009. The FSA would have liked to know about the SEC probe because "Mr. Tourre remained approved in the U.K. and able to perform a controlled function for several months without further enquiry or challenge from the FSA," said the agency in a release. It was not until April that Goldman deregistered Tourre and stripped him of his ability to speak to clients.

The main event regarding Tourre is the looming trial that will be intensely covered. You have to wonder if his relationship with Goldman has deteriorated and how he will portray the bank at the trial.

For more:
- here's the article
- here's The Telegraph article

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