Goldman’s Blankfein: SEC Fraud Suit Is a Political Hit Job

Finding it difficult to see Goldman’s point of view. But the slime deserve due process.

By Henry Blodget

Yesterday, Lloyd Blankfein attacked the SEC’s fraud suit in calls to Goldman clients–describing it as a political hit job
that will ultimately hurt the country.

He also brought up the exculpatory evidence that the SEC left out of its complaint, saying that a staffer of the supposedly swindled ACA knew that Paulson & Co. was planning to go short the Abacus CDO.

The SEC’s fraud case seemed weak to begin with, and it has gotten much weaker in recent days.  The 3-2 split vote among the commissioners as to whether to go forward with the charge appalled a lot of people, ourselves included.

We still think Goldman will settle the charges, but the price tag has likely dropped significantly.

Henny Sender and Stephanie Kirchgaessner of the FT:

In the conversations with private equity executives and others, Mr Blankfein left clients with the impression that he was eager to fight the charges in court. The SEC has requested a jury trial. “He was very aggressive,” said one person called by Mr Blankfein on Wednesday. “He feels that the government is out to kill them, that they are under attack and the whole thing is totally political.” Mr Blankfein said the SEC action “hurts America”, this person said.