SEC vows to follow Goldman Sachs case with more Wall Street actions

27 August 2010

The Securities and Exchange Commission (SEC) is aiming to bring more high-profile cases against Wall Street firms in the future.

Last month, the regulatory body agreed a $550 million settlement with Goldman Sachs after accusing the bank of selling a package of mortgage-backed securities to investors that were designed to fail.

Robert Khuzami, SEC director of enforcement, told the Financial Times that similar cases could be in the pipeline.

"Deterrence works in the white-collar world," he stated.

"Financial institutions look at cases like Goldman and review their own practices and risk-tolerance and think about how risky behaviour affects their brand."

However, the SEC has come under fire recently for not acting in a tough enough manner with banks.

Earlier this year, judge Jed Rakoff criticized a $150 million settlement between Bank of America and the SEC, claiming the deal was "inaccurate and misguided" on the part of the regulator, reported Bloomberg.

By Gary Cooper

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