The bank resisted settling the Securities and Exchange Commission (SEC) lawsuit because it charged the firm with fraud. Insiders at Goldman repeatedly said the firm would never settle any lawsuit on terms which required the firm to "neither admit or deny" a fraud charge. The firm insisted on vigorously denying fraud. The settlement with the SEC was reached only when the government agreed to drop the fraud charges.
So will Goldman fight as hard now? Will Goldman insist that the fraud charges be dropped as part of any settlement?
Insiders at Goldman say that the fraud charge still rankles. Goldman simply does not believe that it engaged in fraud. It believes it does "God's work," as the CEO once put it. So the firm is gearing up to fight the charges by lambasting Fannie Mae and Freddie Mac, according to a person familiar with the matter.
Incidentally, here's how Ben White of Politico's Morning Moneysaid banks are addressing the lawsuit:
BANKS CONSIDER TOTAL WAR—M.M. hears that instead of contemplating settlements of the FHFA mortgage-backed securities lawsuits, big banks and their attorneys are more likely to pursue what insiders describe as an all out war strategy in which they go after Fannie Mae and Freddie Mac (and by default their Democratic supporters) in a scorched earth strategy to show the GSE’s took an active role in creating the very securities they are now suing the banks over.
In short, don't expect a settlement of this lawsuit any time soon.
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