Sunday, April 18, 2010

Goldman Sachs Said to Have Been Warned of SEC Suit 9 months ago

Goldman Sachs responded to the so-called Wells notice from the Securities and Exchange Commission within months and met with the agency officials trying to fend off the civil lawsuit, said the people, who declined to be identified because the talks weren’t public. In March, the New York-based firm said it was cooperating with regulators’ “requests for information.”

“The question is whether a general disclaimer like that is rendered misleading because you left out the specifics,” said Adam Pritchard, a former SEC attorney who teaches law at the University of Michigan in Ann Arbor. “The prudent, conservative choice is to disclose more,” because omissions can lead to shareholder lawsuits, Pritchard said.
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