'Fast Money' Recap: 'Chicago Politics'

The trading panel said the Goldman case will provide the impetus for the Obama administration to put some teeth in its financial reforms.
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NEW YORK (

TheStreet

) -- The markets were jolted Friday by charges of securities fraud against

Goldman Sachs

(GS) - Get Report

.

The

Dow Jones Industrial Average

fell 125.91, or 1.31%, to 11,018.66, while the

S&P 500

dropped 19.54, or 1.61%, to 1,192.13. The

Nasdaq

lost 34.43, or 1.37%, to 2,481.26.

For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw onTV

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Melissa Lee, the moderator of

CNBC

's "Fast Money" TV show, Goldman took a $12.4 billion hit to its market cap from the SEC suit that was filed today.

Karen Finerman, who bought and sold Goldman shares during the trading session, said the "news and the spin" will get "worse before it gets better" because Goldman's legal troubles have to be viewed in the broader context of the big push in Washington to put some teeth in financial reform.

Joe Terranova said today's move smelled of "Chicago politics." He said he sold "my

Google

(GOOG) - Get Report

and some other things" because he sees the Obama administration steadily moving to push through its agenda of reforms.

Tim Seymour said he used the selloff as an opportunity to pick up some names like Google on a pullback.

Guy Adami said it was difficult for him to stay long in this market after today's selloff. Finerman was inclined to wait a little longer before taking any action.

Terranova said he doesn't think today is a "one-day event," adding he wants to wait to see what happens to the Asian markets on Sunday night.

Gary Kaminsky said there's probably a lot of people at Goldman who are pleased by what happened, if it represents the best case the SEC could present against a 31-year-old VP at Goldman who engaged in "financial heroin."

Seymour said the case provides a lot of momentum for the Obama administration to push for financial reform, including placing capital requirements on hedge funds.

Brian Kelly said he expects more to come. He said there's probably a bunch of lawyers who will be salivating this weekend over Goldman swap deals. He said the next shoe to drop might be

Moody's

(MCO) - Get Report

, which he is shorting.

Several panelists said they didn't see any correlation between Goldman's problems and today's slide in Google stock. Finerman said she couldn't see any connection between the two.

Tim Seymour said Goldman's problems could impact Europe, noting

Deutsche Bank

(DB) - Get Report

, was down 10% .

Lee said Goldman's problems didn't result in a flight to gold. She also wondered whether there might be a flight by investors who don't want to have anything to do with John Paulson, one of the figures involved in the SEC's case against Goldman. Paulson's fund has the largest position in

SPDR Gold Trust

(GLD) - Get Report

.

Brad Hintz, an analyst with Sanford Bernstein, said Goldman might lose some discretionary trade business, but he doubts whether it will take much of a hit in its M&A and brokerage businesses.

Lee brought in Jacob Zamansky, a partner at Zamasky & Associates, who said he will file a lawsuit over the matter. He said the case is a "game changer" that will challenge the "resources and talent" of the SEC.

There were no final trades.

-- Written by David Tong in San Francisco

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.

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