The SEC just settled with Goldman Sachs for $550 million over its fraud charges against the firm. In return, Goldman doesn't admit to any fraud, only that it omitted (rather than chose to exclude) key information from its marketing materials on the ABACUS CDO.
$550 million? As we said earlier, that's chump-change.
The damage is done for Goldman Sachs, and they'll quickly move on from this. Their employee, Fabrice Tourre, still has charges hanging over his head. This isn't much different than what we predicted back on April 16.
What is different is the $550 million number. This isn't the type of money that is going to discourage other rivals from engaging in further "omissions." Instead, this record setting level is likely to keep things as is, and keep the SEC looking for future offenders.
But how often will they actually be able to construct cases against them? And if those cases are as weak as the Goldman Sachs one, will they even make it to the $550 million threshold?
The SEC may have scored a record settlement today, but what it shows is that the best government can do to big banking is not going to impact their bottom line very much.