Q.WHAT DOES THIS MEAN FOR OTHER BANKS?
A.For any bank that already has a pending SEC investigation, it could open the door to more settlements. However, there is some speculation that it could also pave the way for further SEC investigations and action by US federal prosecutors.
Q.WHAT DOES THIS MEAN FOR GOLDMAN TRADER FABRICE TOURRE?
A.Fabrice Tourre, the Goldman trader at the centre of the SEC investigation, is still on paid leave, according to the bank. Although the settlement takes Goldman off the hook, it is understood that “Fabulous Fab” Tourre could still be subject to a criminal investigation.
Q.WHO GETS A CUT OF THE PAYMENT?
A.The total settlement is for $550m. Of that, Goldman will pay the US Treasury $300m, while $250m will be paid to investors, including Royal Bank of Scotland (RBS) and Germany’s IKB bank, which were harmed by the bank’s actions. RBS gets $100m, while IKB will get $150m.
Q.IS THIS A GOOD RESULT FOR GOLDMAN?
A.It is little more than a slap on the wrist. Goldman earned more than £13bn last year. Its shares, which lost 22 per cent of their value in the second quarter, largely due to the fraud charges, jumped 4.6 per cent in after-hours trading to $152.