NEW YORK (Bloomberg) — Goldman Sachs Group Inc.'s $550 million settlement with US regulators, announced at the end of last week, will benefit the firm by ending three months of uncertainty at an affordable price. Now the rest of Wall Street begins calculating the cost.

Investors welcomed the deal with the Securities and Exchange Commission, saying the company won key points: The cost was below some analysts' estimates of at least $1 billion; no management changes were required; and Goldman Sachs said the SEC indicated it doesn't plan claims related to other mortgage-linked securities it examined.

"You'd have to look at it as a victory for Goldman," said Peter Sorrentino, senior portfolio manager at Huntington Asset Advisors in Cincinnati, which manages $13.3 billion including Goldman Sachs shares. "This takes a cloud off the stock."

In the settlement, unveiled less than two hours after the Senate passed legislation to reform the financial system and avert future crises, Goldman Sachs acknowledged that marketing materials for the 2007 deal at the centre of the case contained "incomplete information". In its April 16 suit, the SEC accused the firm of defrauding investors in a mortgage-backed collateralised debt obligation by failing to tell them that hedge fund Paulson & Co., which was planning to bet against the deal, had helped to design it. In its original public response, Goldman Sachs had called the SEC's case "unfounded in law and fact" and maintained that it made all disclosures about the CDOs that should be material to the "sophisticated" investors who lost money on the deal. Chairman and chief executive officer Lloyd Blankfein, who said the day the suit was filed was "one of the worst days in my professional life", said in May that the bank established a committee to review the firm's business standards.

The settlement requires the New York-based company to increase training for employees who structure or market mortgage securities, and to bolster the vetting and approval process. Those changes will probably lead to a new industry standard for disclosures in private sales of securities, even to the most sophisticated investors, analysts said.

"All of the firms are going to adjust their internal standards for this," Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York, said in an interview. The agreement means "a private placement doesn't absolve you from the accuracy of the disclosure and you'd better have very, very good compliance watching what your sales people are saying".

Robert Khuzami, the SEC's director of enforcement, said at a news conference yesterday that his agency means to send a signal to the entire industry.

"We would strongly encourage other institutions to adopt any kinds of best practices that they see across the street in order to prevent this kind of wrongdoing," said Khuzami, 53. "The deterrence, and preventing a fraud before it occurs, is a much better outcome than picking up the pieces afterwards."