From Overseas Press

Goldman Sachs' soul search-sincere or strategy?

(Agencies)
Updated: 2010-04-30 09:34

TO SETTLE OR NOT?

A former SEC official agreed that Goldman would not settle quickly given that the bank has already born the brunt of the bad publicity that can sometimes be avoided upon settlement.

"I see no necessary correlation between that statement by Blankfein and the likelihood of settlement," former SEC chairman Harvey Pitt said of Blankfein's comment that the firm is reexamining its business practices.

However, he said "neither Goldman nor the SEC can afford to take this case to trial."

Goldman is expected to file a motion to dismiss the case on legal grounds, but is not expected to go to war with the SEC. Too much is at stake for Goldman, which has had a good relationship with the SEC and will have to deal with the regulator on other issues.

"Given the combative posture Goldman has taken, I assume they will try to get the case dismissed and or move for summary judgment before attempting to settle," Pitt said.

Ohio Attorney General Richard Cordray told the Reuters Global Financial Regulation Summit that how Goldman proceeds could be influenced not only by the merits of the SEC's case, but by pressure from the public or clients, reputational damage, and whether additional charges are expected.

"I certainly think they will begin to realize that the landscape for them is much worse than they originally thought," Cordray said.

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