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by Derek Loosvelt | November 09, 2010


After enjoying a rather lengthy stretch of time without any (il)legal news, Goldman Sachs was back in headlines today due to one confirmed indiscretion and two additional alleged ones.

Regarding the confirmed, it was revealed that Goldman was forced to pay a $650,000 fine for failling to disclose to Finra (the Financial Industry Regulatory Authority) that the Fabulous Fabrice Tourre and another Goldman employee had received word back in mid-2009 that they were the subject of an SEC investigation.

By law, firms must notify Finra within 30 days of any investigation; Finra then posts the existence of the investigation in a "data base that can be viewed by other regulators. Wall Street firms seeking to hire employees can also check the database."

Goldman only told regulators about the notices seven months after its employees received them.

At a glance, it looks like Goldman's move to sidestep the law was, perhaps, a prosperous one. This past April, after the SEC filed its suit against Goldman, a media attack was launched upon the bank that turned out to be a PR nightmare and resulted in the firm's stock (both literal and metaphorical) to slide significantly. Had Goldman notified Finra within 30 days, as it was legally bound to, perhaps the media attack and stock slide would've began much earlier.

Along with the light slap, Goldman is also under investigation (as revealed in the bank's latest quarterly statement) for Abacus-like indiscretions involving two other CDOs. According to the new SEC lawsuit (via the ), "Goldman engaged in [another] 'heads we win, tails you lose' exercise, failing to disclose that the securities were structured by Goldman in such a way that Goldman would profit from its own short positions in subprime mortgages." To boot, Goldman also indicated that "it expects to be the subject of additional litigation and regulatory and other investigations related to mortgage offerings, loan sales and CDO deals."

And if that wasn't enough, there's this: Jamie Dimon and Brian Moynihan both now have bragging rights over Lloyd Blankfein.


Filed Under: Finance

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