SEC Was Split Over Decision to Settle With Goldman Sachs

The Securities and Exchange Commission was split when they decided to bring charges against Goldman Sachs (GS). Commissioners voted 3 to 2 along party lines, with Democratic appointees in the majority. It turns out that the decision to settle with Goldman was also not unanimous.

The Wall Street Journal reported: "The 3-2 decision on party lines Thursday came after a 30-minute closed-door session where the SEC's two Republican commissioners voted against settling, said people familiar with the matter. Mary Schapiro, the SEC chairman appointed by President Barack Obama, cast the deciding vote, the people said."

The paper goes on to say that the SEC probably had some doubts about the strength of its case, and the news that the commissioners did not vote unanimously may undermine the agency's PR that it was a major victory.

The conventional wisdom is that Goldman "won" the case because the $550 million penalty is not terribly large for a firm its size. Analysts also argue that Goldman scored a victory because it did not have to admit to any wrongdoing.

Advocates of the SEC's decision say the agency collected one of the largest fines in its history. But for Goldman that hardly matters. It can now go on about its business.