"Settle Every Case" S.E.C. Settles With Victorious Goldman; Sacks Unopened.

   This updates a series of posts.  A representative post was written in this space on April 22, 2010 entitled, "'Who's in Charge, Me or the SEC' Asks Goldman ... No Longer Sure of the Answer." It is sure now.

   The S.E.C., as expected, did not overcome its fear of trying cases and settled, again.  See Graham Bowley, "With Token Settlement, Blankfein Unscathed" p. B1, col. 2 (New York Times Nat'l ed., "Business Day" Section, Friday, July 16, 2010). 

   Goldman settled for what it agreed to call a "penalty" in the amount of $550,000,000.00.  "The penalty amounted to about 15 days of profits."  Julie Creswell, "Goldman Was First, Maybe Last"  p. B1, col. 6 (New York Times Nat'l ed., "Business Day" Section, Saturday, July 17, 2010), published online with a different title, "After Goldman's Concession, Regulators May Be Satisified".  With a 3-to-2 vote, the S.E.C. Commissioners agreed to accept the settlement recommended by its chief "enforcer".  Louise Story, "S.E.C. Panel Was Divided on Goldman Case" p. B4, col. 3 (New York Times Nat'l ed., "Business Day" Section, Saturday, July 17, 2010).

   On the same day, A.I.G. agreed to settle a securities class action in Ohio for $725,000,000.00.  "Taken together with earlier settlements, A.I.G. will ladle out more than $1 billion to Ohio investors, money that will go to firefighters, teachers, librarians, and other pensioners." Michael Powell and Mary Williams Walsh, "A.I.G. to Pay $725 Million in Ohio Case" p. B1, col. 6 (New York Times Nat'l ed., "Business Day" Section, Saturday, July 17, 2010).  

   What accounts for the difference in the two settlement amounts?

   One difference is that the Ohio Case was brought by the Ohio State Attorney General.  "State attorneys general often have proved more aggressive than federal regulators in going after financial houses in the wake of the 2008 crisis."   Michael Powell and Mary Williams Walsh, "A.I.G. to Pay," New York Times, supra.

  The far lesser results achieved by the Settle Every Case or SEC "enforcer" who settled with Goldman, on the other hand, have drawn their own reaction at the SEC:  He is in line for a promotion.  See  Louise Story, "The Generals Who Ended Goldman's War" p. 1, col. 2 (New York Times Nat'l ed., "SundayBusiness" Section, Sunday, July 18, 2010).

   Old saying:  "Everything is changing, nothing is new."

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