The Corner

The Goldman Suit Appears to Have Outlived its Political Usefulness

As the Dodd bill speeds its way toward passage, Goldman suits and SEC officials are meeting to discuss a settlement of the fraud lawsuit stemming from the ABACUS deal.

Goldman seems to have been chastened, or at least become cognizant of the need to appear so, as the DOJ ponders a criminal investigation:

Goldman’s willingness to even meet with the SEC is a sign that executives are scaling back their combative stance since the lawsuit was filed April 16. While the company hasn’t retreated from its public statements that the suit’s accusations are groundless, some Goldman executives are taking a softer line with restive shareholders. . . .

The talks come ahead of Goldman’s scheduled shareholder meeting Friday morning in lower Manhattan. Protesters are expected outside the building. The meeting is expected to be a big departure from the almost perfunctory events of the past, when investors applauded Goldman’s ability to make money at a blistering pace. Also on Friday, Goldman directors are expected to discuss a revision of some company practices in dealing with customers, people familiar with the situation said.

On Monday, Goldman Chief Financial Officer David Viniar and Vice Chairman J. Michael Evans told some large shareholders that Goldman “would be happy to settle today,” according to people who heard the comment. Mr. Viniar said the company “does not want to antagonize the SEC,” adding that a settlement is impossible unless both sides agree.

More here.

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