We’ve just completed listening to Goldman Sachs (GS) Q1 conference call, and much to our delight, the firm spent a lot of time talking about the SEC charges against it. We thought, perhaps, Goldman might have decided not to discuss it.
So here’s what we think right now:
- Goldman is definitely going to settle. Yes, right now, they’re fighting the SEC, but they very clearly acknowledged that their options are wide open. They did this multiple time. When they can get to a deal that’s reasonable, they’ll settle.
- They were suckerpunched. They have no idea what the SEC plans to do next.
- Goldman somewhat unbelievably says it can’t believe why ACA assumed Paulson was long. We find Goldman’s disbelief to be hard to swallow, but over and over and over again, the firm emphasised that ACA and IKB were serious, sophisticated investors, and that the only information that was material was the quality of the underlying assets in the CDO.
- And to that point, they think it’s not material whether the Paulson or ACA selected the assets, since EVERYTHING crahed from that year.
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