My father was a professional gambler and used to carry a roll of money that he called “walking around” money.
Walking around money is what the SEC settled for in the Goldman Sachs case.
$550 million is walking around money to a company like Goldman Sachs. It is less than 5% of the $10 billion in bonuses it paid itself last year.
Maybe “walking around” money is an understatement.
The stock market understood that Goldman got the best of the deal. Goldman’s stock price surged 4.43% on rumors of a settlement. As the Huffington Post pointed out, the stock gain was probably enough to cover the $550 million fine.
Also, Goldman got a monkey off its back. It can go on without a lawsuit hanging over its head. If the SEC had taken the time to do a through and complete investigations, who knows what they would have found.
In its never ending ability to accommodate Wall Street, the SEC announced the settlement on the day when the rest of the world was focused on passage of the financial reform bill. Thus, whatever “embarrassment” Goldman might have suffered was mitigated by the settlement not being a top news story.
One of the first tricks they teach you in corporate public relations is to release bad news on a day when it will get buried.
Goldman is rich enough to hire the best public relations people.
And it looks like the best lawyers. There has to be some major high fives going on in the boardroom after getting such a sweet heart deal.
I am not sure what the SEC hoped to accomplish with a quick and inadequate settlement. It didn’t make those of us on Main Street feel any better about our “watchdog.”
It just gave more evidence that the SEC is safely in the arms of Wall Street.
Don McNay, CLU, ChFC, MSFS, CSSC is an award-winning financial columnist and Huffington Post Contributor.
You can read more about Don at www.donmcnay.com
McNay has Master’s Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University.
McNay has written two books. Most recent is Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery
McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field.
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