Will Goldman Settle with the SEC?

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Two days after Goldman Sachs execs were battered by a Senate subcommittee during a hearing into its role in the financial crisis, the New York Post reports the firm, which has vehemently denied the SEC’s fraud allegations, is moving toward a settlement in the case. From the Post’s story:

“It’s almost a certainty that there will be a settlement,” said a source.

As another person put it, the SEC has an “unlimited supply of ammunition” in the form of e-mails and records that it could release, and Goldman officials would like to avoid having those documents fired back at them the way they were on Tuesday.

Up to now, Goldman, which has endured a withering fusillade of criticism from the public and politicians, has declared that the SEC’s case against it and Tourre has “no basis in fact.”

However, the growing view inside the firm is that Goldman may not be able to afford going toe-to-toe with the SEC in the court of public opinion if the civil case were to head to trial.

Settling the SEC case would seem to make sense for both sides. Goldman would sidestep another damaging public skirmish, and the regulatory agency, which earned plaudits for targeting Wall Street’s alpha dog, isn’t forced to litigate a case that many analysts have characterized as weak. With all those denials of wrongdoing still hanging in the air, however, I suspect that even if they reach a deal, any announcement would be shelved until the case fades from the headlines a bit. The SEC declined to comment on the matter when I called.
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