SEC to investigate timing of Goldman Sachs case settlement

26 July 2010

The Securities and Exchange Commission (SEC) is to investigate the timing of its $550 million settlement with investment bank Goldman Sachs.

According to reports, David Kotz, an internal inspector for the SEC, began an investigation into whether politics had influenced the SEC’s lawsuit against the investment bank earlier in the year.

Now the probe is to be expanded to include the timing of the recent settlement between the financial institution and the industry regulator.

The bank agreed to pay the SEC $550 million as part of a settlement reached on July 16th, the same day on which US President Barack Obama’s financial reforms were passed in Congress.

Mr Kotz revealed that the investigation would be widened in a reply to a request from congressman Darrell Issa.

In the reply, quoted by The Street, the former wrote: “We will seek review of the documentary evidence, including emails between and among the individuals who may have participated in or been aware of the timing of the SEC settlement.”

The SEC launched legal action against the bank earlier in the year after it claimed Goldman had misled investors over an investment product related to subprime mortgage securities.

By Jim Ottewill

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