SALON

Thursday, Sep 27, 2012 4:45 PM UTC

Goldman Sachs settles SEC charges for almost $12M

By

Topics: From the Wires,

WASHINGTON (AP) — Goldman Sachs has agreed to pay nearly $12 million to settle civil charges accusing one of its executives of providing campaign services to a Massachusetts official in return for bond business.

The Securities and Exchange Commission also charged former Goldman Sachs vice president Neil M.M. Morrison with trying to influence the awarding of state contracts through campaign work for former Massachusetts Treasurer Timothy Cahill.

Morrison campaigned for Cahill from his Goldman Sachs office using company phones and email between November 2008 and October 2010, the SEC said. The services weren’t reported by Goldman Sachs, the SEC said. The company earned more than $7.5 million in fees from underwriting Massachusetts bond sales after Morrison’s activities, the agency noted.

Goldman Sachs fired Morrison in December 2010.

By law, firms are banned from underwriting municipal bond sales within two years of making any contribution to an official of the government issuing the bonds.

Regulators have issued warnings for years over so-called “pay-to-play” arrangements between investment firms and state and local government officials in the awarding of contracts for business in the $2.7 trillion municipal bond market. The market is tapped by governments around the country to finance schools, roads, hospitals and public works projects.

The SEC has brought a number of such cases against Wall Street banks and other investment firms, often involving campaign contributions or other payments. However, the new Goldman Sachs case marked the first time the agency accused a company of making non-cash contributions to a political campaign.

Morrison’s attorney didn’t immediately return a telephone call seeking comment.

“Municipal finance professionals who use their firm’s resources to campaign on behalf of political candidates compromise themselves and the firms that employ them,” SEC Enforcement Director Robert Khuzami said in a statement.

Goldman Sachs agreed to pay a $3.75 million fine and about $8.2 million in restitution plus interest. The SEC said the $11.95 million Goldman Sachs is paying was the largest settlement amount it had ever won in a case involving “pay-to-play” violations.

Goldman Sachs neither admitted nor denied the allegations but it did agree to refrain from future such violations. The company also was censured by the SEC. Censure brings the possibility that Goldman Sachs could face a stiffer sanction if the alleged violation is repeated.

“We detected Morrison’s activities, promptly alerted regulators, terminated his employment and fully cooperated with the investigations,” Goldman Sachs said in a statement. “We accept responsibility for the consequences of his unauthorized actions under the terms of the settlements announced today and are pleased to resolve these investigations.”

More Marcy Gordon.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 0 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations