Goldman Sachs Group Inc. will pay $5.1 billion to resolve U.S. allegations that it failed to properly vet mortgage-backed securities before selling them to investors as high-quality debt, according to Bloomberg.
New York-based Goldman Sachs, which announced details of the accord in January, will pay a $2.39 billion civil penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief, Bloomberg reported referring to a Justice Department statement.
”This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart Delery, according to the report.
Goldman acknowledged a statement of facts put together as part of the resolution, which gives examples of what the government said were false and misleading representations to investors, Bloomberg writes.
Monday`s resolution is the fifth multibillion-dollar settlement reached with U.S. banks resulting from the government`s push to hold Wall Street firms to account for creating and selling subprime mortgage bonds that helped spur the 2008 financial crisis.
Other banks, including Royal Bank of Scotland Group Plc and Deutsche Bank AG remain under investigation, people familiar with the matter have said, according to Bloomberg.
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