You will recall, no doubt, our puzzlement at the recent payment by Goldman to make "go-away" with this subprime business (in Massachusetts anyhow). We are even more puzzled now that Bloomberg is reporting how little Massachusetts Attorney General Martha Coakley had on Goldman:
The big news from Goldman and Massachusetts Attorney General Martha Coakley this week was a $60 million settlement, under which the investment bank resolved her office's investigation into its packaging of mortgage securities backed by subprime home loans. Per the usual custom in such accords, Goldman didn't admit any wrongdoing.
The odd part is that Coakley's office didn't accuse Goldman of any wrongdoing, either. It filed no lawsuit. And it made no allegations that Goldman had violated any statutes or rules.
Why did Goldman pay if Coakley's investigators couldn't identify any infractions to allege? That's a mystery. The only statement I could squeeze out of Goldman was a one-liner from a P.R. man, Michael DuVally. "Goldman Sachs is pleased to have resolved this matter," he said. I'll bet it is.
The closest thing to an accusation Coakley could muster during a May 11 press conference was that Goldman "had played a role" in predatory lending in the state. Then again, so did a lot of other companies. By that standard, even local newspapers that printed the lenders' ads might be in trouble.
Let's just see here. Tax revenues crashing. Romneycare. Big social service infrastructure.
Now introduce Lloyd:
"Hey Martha! Got a deal for ya. You give us a waiver for any and all prosecutions arising out of this subprime business, really just a piece of paper, and I'll give you a check for $60 million. Whatcha think?"
Who do you think got the better end of this trade?
Goldman Pays Greenmail to Make Snoops Go Away [Bloomberg]