The Financial Times goes above the fold on page one today with a story on how “Goldman plans to overhaul practices.”
Looks all the world like the FT hyped this piece of flackery—and it’s dubiously sourced, to boot.
Here’s the subheadline:
Move could help settle charges filed by SEC/Bank to change way it interacts with clients
What Goldman (an Audit funder) is actually doing, according to the FT‘s own reporting, is “studying” some incremental changes “under consideration” for “review”—ones that would hardly amount to an “overhaul”:
In one new practice under consideration at Goldman, the bank would insist that employees seek confirmation from clients that they understand the risks associated with a given security and how their dealings with Goldman might change their total exposure, according to a person familiar with the bank’s plans.
Goldman was also studying ways to ensure complicated securities are marketed only to appropriate clients, the person said. Goldman’s push to “tighten up” standards suggests its willingness to adapt in the face of mounting scrutiny.
The possible moves, which might be under consideration for studying and could be, maybe, implemented some day in the future, though it’s unclear when or whether such contingencies would amount to a hill of beans, “could help it settle” with the SEC, the FT says. Which may be (potentially) true, although the paper also reports settlement talks aren’t even under way, which presumably means they’re “under consideration,” like the plans to settle the potential, hypothetical talks that could occur at some point, conceivably.
Anyway, on to the questionable sourcing regarding the SEC and Goldman’s possible future settlement talks:
…people familiar with each side of the dispute concede an agreement would be in the best interests of both sides.
Really? So the SEC thinks settling this would be better than taking it to trial? Would that be the current SEC or some SEC of Christmas Past? The next paragraph:
A former top SEC official said that the regulator needed to demonstrate real change had occurred, while the bank needed to put the uncertainty behind it.
That leads readers to believe that the FT is using a “former top SEC official” as one of its “people familiar with each side of the dispute.” That doesn’t cut it.
Needless to say, former top SEC officials aren’t really known for their hard-assed aggressiveness. For example, remember those “former high-ranking SEC officials” the FT reported last week are saying that the agency bungled the Goldman case?
Might the ex-official quoted today be one of those—a “former top official who, like most of those interviewed, asked for anonymity because their employers either work for Goldman or are being probed by the SEC”?
The paper’s handling of that story doesn’t exactly give confidence on this one. Nor does the fact that no one else has matched this story.
If you want to know what’s really going on here, though, turn to page seventeen of today’s FT, which is the real story, if you ask me. That headline:
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.Goldman in PR bid to stave off crisis.
Fabiani to create ‘counter-narrative’/Bank also looks to rebuild branding
