Those who play with fire ... The cost of protecting Goldman Sachs (GS) debt rose to 235 basis points versus 182.5 earlier Thursday, according to CMA Datavision. It costs $235,500 annually to protect $10 million of its senior bonds for five years. On Tuesday, the cost was $156,000.
First the easy part: Goldman Sachs (GS: 147.01, -1.15, -0.78%) officials have come to the conclusion they need to settle the high-profile civil fraud case recently filed by Securities and Exchange Commission over the firmâs sale of toxic debt to investors who lost big bucks on the deal. Now the hard part: Paying the bill, which, according to legal experts, rival CEOs and even people inside Goldman, could range anywhere from $1 billion to $5 billion. http://www.foxbusiness.com/story/markets/industries/finance/cost-goldmans-freedom/
Goldman is also now being investigated by the Financial Industry Regulatory Authority, the securities industryâs self regulator, for failing to notify the agency that SEC had issued a âWells Noticeâ signaling the enforcement staff was recommending charging the firm until after the charges were made public. -------------------------- I thought firms of a certain size were exempt from the wells notice requirement. If this is true which I think it is then this whole article is suspect pos for writing without all the facts.
Take a look: http://blogs.wsj.com/deals/2010/04/19/read-goldmans-rebuttal-to-secs-wells-notice/ And Goldman isn't too big to receive a Wells.
But Goldman apparently was under no legal responsibility to spill the beans on either action, even though that would have given investors an early warning that its stock might tank. SEC regulations say information about legal proceedings doesn't have to be made public if the amount involved doesn't exceed 10 percent of a firm's assets. Goldman's assets are an estimated at $849 billion. "It's a horrendous rule . . . a joke," a former SEC official told The Post. Read more: http://www.nypost.com/p/news/nation...ds_probe_9GsXz0QxmqRMCDRgB8kL7M#ixzz0nCpts1n8