Goldman got to keep 100% of what it really wanted, namely the ability to cling to its claim that if did nothing wrong.
It did acknowledge a “mistake” for not telling CDO buyers that hedge fund operator John Paulson helped booby-trap the security before it was sold. It is common for the SEC settle Wall Street cases without an admission of guilt, but is not typical for it to allow the accused party to do but at the same time admit to a “mistake.” That’s how it works when your political influence permeates the government. You get to deny wrongdoing at the same time you admit to wrongdoing.
The Securities and Exchange Commission (SEC) ballyhoos that the $550 million settlement is the largest ever, but is likely viewed by Goldman as the cost of doing business. Goldman will pay the fine and move on.
In this case, Lloyd Blankfein and the other Goldman Masters of the Universe never cared about the money. In fact, they probably would have been willing to pay a multiple of the settlement. When you are that rich, you can purchase anything you want except for your reputation. Oh yes, you can try by giving money to charity and getting your name on buildings and so forth, but that only goes so far.
The public suddenly perceived that Blankfein and Co. maintain a fantastic flow of wealth not only due to their own talents and efforts, but also because they have carefully seeded the government with their allies, starting with Timothy Geithner. Goldman received $12.9 billion as part of the AIG bailout when the government could have just as easily stiffed Goldman and other counterparties.
The wave of anti-Goldman vitriol caught the firm by surprise. That is why Blankfein has seemed miffed, and at times positively indignant, in recent months.
Of course, it has been open season on Goldman, and there have been plenty of cheap shots. But the essential case that Goldman gets special treatment at the expense of taxpayers is absolutely on target.