The Securities and Exchange Commission’s fraud lawsuit against Goldman Sachs (NYSE:GS) is over. The SEC said the firm’s main offense was telling the German bank IKB that a company called ACA had selected the portfolio of mortgage-related investments underlying the deal, when actually the selection process was heavily influenced by Paulson & Co., a hedge fund that later made $1 billion shorting Abacus. Bloomberg reports that there is significant misinformation circulating, and the market is confused.

The reputation metrics confirm the apparent market confusion. First, the Steel City Re Corporate Reputation Index™ shows evidence of significant resilience. Goldman Sachs entered this period with a reputation rank of .97 and is currently at .94. A drop, for sure, but relative to the precipitous fall earlier this year, a remarkable return when compared to the 38 firms in the capital markets sector.

The equity markets are more sanguine and have the firm underperforming the median of its peers by 22%.

In fact, overall the firm has lost a significant amount of enterprise value. Remember that this value, according to Goldman Sachs, comprises its people, capital and reputation. Which leads us to conclude that the equity market is not appreciating the reputational value that other stakeholders see. Are the reputation data suggesting that the company is underpriced?

Perhaps. Stay tuned when next week on Monday we roll out RepuStars II, a new composite index whose constituents, numbering up to 57 companies, are selected on the basis of both reputational and fundamental metrics.