Goldman Sachs Kept Mum About Potential SEC Charges for Months
The company received a "Wells Notice" from the SEC sometime in the past six months. Wells Notices are sent to companies and individuals to inform them that they're likely to be charged with violations of SEC rules. The recipients then can dispute the charges.
Many companies confirm the receipt of a Wells Notice in SEC filings but are not required to, according to Reuters. That Goldman didn't will raise concern among some of its shareholders and the media about why the company kept the information secret.
Secrecy and Self-Interest
This reinforces the perception that the big investment bank does what it can to operate in secret with very little regard for the fallout to others. Goldman has already been described in some circles as having been coy on more than one occasion -- its work helping Greece to conceal some of its debt in a currency swaps deal is often cited.
The SEC charged Goldman and Fabrice Tourre, a Goldman vice-president, with two counts of securities fraud, one under section 17a of the 1933 Act and one under section 10(b) and rule 10b-5 of the 1934 Act.
Luckily for Goldman, its legal defense against the SEC charges won't depend on public opinion. But the Wells Notice incident is likely to dirty its already tarnished image.