SEC split in decision over Goldman Sachs settlement
Reported by Eric; crwenewswire.com Mideast correspondent
A difference of opinion has arisen in the Securities and Exchange Commission over their decision to settle the lawsuit against Goldman Sachs.
On Thursday the US giant bank Goldman Sachs agreed to pay almost $550 million in a fine on a condition that it doesn’t have to face fraud allegations from which the Bank would lose their license. According to allegations by the SEC, Goldman Sachs knew about the real estate market crash and mortgage crises and had secretly designed a mortgage security product by another Goldman client to take advantage of its customers.
Now there is a split decision regarding this landmark lawsuit, one of the most closely watched cases in the 76 year history of Securities and Exchange Commission.
On Thursday’s closed door session, two Republican commissioners voted against the settlement. The spilt over the decision has become more political in nature. Republican commissioner Kathleen Casey has also questioned SEC staff about imposing such a large penalty on Goldman Sachs based on a lesser charge than the Fraud that was alleged in the complaint.
Casey was also against filing the fraud case against Goldman Sachs in the first place as she believed the case wasn’t strong enough and that the SEC could lose it if they went to trial.
Mary Schapiro appointed SEC chairman by President Obama will be the one making the deciding vote on whether to settle the lawsuit against Goldman Sachs
A former SEC enforcement lawyer Russell Ryan commented on the fraud charges by the SEC “usually a strong indication the SEC had some doubt whether it could prove intentional fraud.”
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