Goldman Sachs (GS) and Wells Fargo (WFC) have both said they have received Wells notices from the SEC, indicating that they could face civil charges related to disclosures about subprime mortgages.
Goldman also noted in its annual report that the SEC is asking questions about its transactions with bankrupt financial company MF Global, Marketwatch reported.
For now, the market appears to be shrugging off the inquiries. Traders are focused today on the release of data about the European Central Bank’s refinancing program, which has lent 513 billion Euros to European banks at extremely low interest rates. The news is helping lift the financial sector and the entire market. Wells Fargo is up 1.5% and Goldman is about 0.5% higher.
But if the SEC does file civil charges, it could put pressure on the Goldman board to find a replacement for Lloyd Blankfein. Some analysts have called for Blankfein to be replaced, if only to quiet criticism of Goldman’s business practices.
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