Prof. Larry Ribstein on the Goldman ‘Abacus’ settlement. He predicts that the end result will be confusion about what big banks must disclose:
[W]hat lesson should Wall Street take away from this case? What, exactly, does a bank in Goldman’s position have to disclose to a customer? The identity of another customer on the other side, as the complaint suggests? Only when that customer is somebody like Paulson. What does that mean? Only if the customer has selected the portfolio? What does that mean? Many deals are put together with buyers in mind. Suppose ACA (the collateral manager) assembles the portfolio here with Paulson in mind, and then Paulson says, “that’s for me. Now I’ll invest.” Is this more “material” than having Paulson take the initiative? Suppose they collaborate in putting the portfolio together?
Get ready for even more fine print in our ever less readable disclosure regime.
On the other hand, why bother. If the government targets you, no amount of disclosure will save you.
And, yes, Barry, Larry is a lawyer.