The firm will pay $550 million to settle charges that arose from the subprime mortgage meltdown.
Also: Wall Street does victory lap following Goldman settlement
As if there was any doubt who owns the US these days. Wall Street has bounced positively following the settlement that was "only" $550 million dollars. This amount is much less than the previously feared $1 billion. If you listen closely, you can hear the Champagne corks popping all around Wall Street.
Goldman Sachs Group Inc.’s $550 million settlement with U.S. regulators yesterday will benefit the firm by ending three months of uncertainty at an affordable price. Now the rest of Wall Street begins calculating the cost.
Investors welcomed the deal with the Securities and Exchange Commission, saying the company won key points: The cost was below some analysts’ estimates of at least $1 billion; no management changes were required; and Goldman Sachs said the SEC indicated it doesn’t plan claims related to other mortgage- linked securities it examined. The stock’s late surge on anticipation of a settlement yesterday added more than $3 billion to the company’s market value, and it climbed further after New York trading closed.
“You’d have to look at it as a victory for Goldman,” said Peter Sorrentino, senior portfolio manager at Huntington Asset Advisors in Cincinnati, which manages $13.3 billion including Goldman Sachs shares. “This takes a cloud off the stock.”
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