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[Update, 07/15/10, 2:21 p.m. PDT: Goldman Sachs & Co. agreed to pay $550
million to settle civil fraud charges of misleading buyers of mortgage-related investments.
Goldman Sachs will pay $300 million in fines to the SEC. The rest of the money will go to compensate those who lost money on the investments.]
Bill Radke: The Securities and Exchange Commission might settle its lawsuit against Goldman Sachs over the investment bank’s actions during the housing collapse. This morning’s Wall Street Journal reports the SEC and Goldman are talking about settling this and some smaller investigations into the bank’s mortgage practices. Marketplace’s Alisa Roth joins us live from New York. Good morning.
Alisa Roth: Good morning.
Radke: What might this settlement be?
Roth: Well it looks like the settlement would cover this lawsuit the SEC filed in April. It could also take care of several lower-profile investigations the SEC has going on against Goldman. Some people have suggested Goldman could pay a fine, a billion dollars or even more to settle this. The thing is, there are a lot of people who’d have to approve the deal: Goldman doesn’t want to have to admit any wrongdoing, because it could damage its reputation and open it up to more legal problems. The SEC has to make sure it still has room to go after Goldman if new information were to turn up at some point in the future. And a federal judge will have to sign off on the whole thing.
Radke: Does this mean Goldman will escape any charges in this mortgage business?
Roth: You know so far, it’s proven incredibly difficult to actually nail any of the big banks on the stuff they did leading up to the financial crisis. In any case, a lot of civil lawsuits have been filed against Goldman, and theres also supposedly a criminal investigation going on against the bank to see whether its people committed some kind of securities fraud related to its mortgage trading business.
Radke: OK, Marketplace’s Alisa Roth. Alisa, thanks.
Roth: You’re welcome.
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