Goldman Sachs To Pay $5 Billion In Mortgage-Backed Securities Case


Goldman Sachs will pay about $5 billion to resolve state and federal investigations into its handling of mortgage-backed securities in the years leading up to the 2008 financial crisis, NPR reports. The agreement will settle “actual and potential civil claims” by the U.S. Justice Department and the attorneys general of New York and Illinois, as well as the Federal Home Loan Banks of Chicago and Seattle and the National Credit Union Administration.

The firm will pay a civil penalty of $2.385 billion, a cash payment of $875 million and $1.8 billion in consumer relief. Ever since the subprime mortgage crisis upended the global financial system, authorities have been investigating a number of large financial institutions and their sale of mortgage-backed securities. The investigations centered on whether the banks misrepresented the real value of the assets. Regulators have already won large multibillion-dollar settlements from several large banks, including JPMorgan Chase, Bank of America and Citigroup.

Comments are closed.