Goldman Sachs is hoping to avoid the Securities and Exchange Commission’s charge of fraud by reaching a settlement on a lesser offence and agreeing to a fine of hundreds of millions of dollars, according to people familiar with the bank’s negotiating position.
Goldman Sachs is hoping to avoid the Securities and Exchange Commission’s charge of fraud by reaching a settlement on a lesser offence and agreeing to a fine of hundreds of millions of dollars, according to people familiar with the bank’s negotiating position.
Goldman, which has been accused of civil fraud over a complex mortgage-related security called Abacus, is trying to focus settlement talks with the SEC on the less serious charge of omitting or mis-stating material facts to investors.
Regulatory experts say that companies charged with fraud often seek a settlement on a lesser charge but it is unclear whether the SEC would agree to downgrade such a high-profile case.
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A lesser charge would reduce Goldman’s risk of being sued by investors and help the bank avoid the reputational damage of having settled a fraud charge, according to people familiar with the situation.
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