Some interesting comments from Chris Whalen of Institutional Risk Analytics on Squawk Box this morning regarding the Goldman settlement.
First, he noted, that 50 years ago Goldman would’ve dug in and fought this if the bank really believed it hadn’t done anything wrong. Maybe that’s a criticism of the lawyer culture, we’re not sure.
But he also argued that while everyone presumes the SEC caved, he thinks the regulator actually has a big backlog of various civil cases it’s yet to bring (he cited an approaching statute of limitations regarding some subprime stuff), and that that’s why the SEC cut a deal.
It seems a bit odd that they’d give up the big prize in anticipation of a series of smaller ones, but it’s an interesting thought, and certainly a risk folks may not be thinking about right now.