The Security and Exchange Commission's lawsuit against Goldman Sachs Group Inc. will not have a material impact on the investment bank's financial profile or rating, Fitch Ratings said Monday.
As a result, Fitch took no action on the existing ratings of Goldman, keeping its long-term issuer default rating at "A plus" and its short-term rating at "F1 plus," both investment grade.
The SEC on Friday charged Goldman in a civil suit with securities fraud, alleging that the Wall Street titan sold mortgage-backed investments called collateralized debt obligations, or CDOs, in early 2007 without telling the buyers that the securities were created with input from a client who was betting on them to fail.
While not taking any action on Goldman's ratings, Fitch did say it believes the case is part of broader reviews, and the ratings agency "would not be surprised to see other cases filed in the future against other arrangers of CDOs, particularly CDOs backed by structured finance assets issued before the financial crisis began."
Fitch said it expects Goldman can absorb any potential monetary fine or settlement from the case. The agency said it will monitor the company to see if the negative publicity from the case hurts Goldman's standing with its clients or its unfettered access to the capital markets.
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